DAY TRADING THE WALL STREET WAY Founded in 1807, John Wiley & Sons is the oldest independent publishing company in the United States. With offices in North America, Europe, Australia, and Asia, Wiley is globally committed to developing and marketing print and electronic products and services for our customers’ professional and personal knowledge and understanding. The Wiley Trading series features books by traders who have survived the market’s ever changing temperament and have prospered—some by reinventing systems, others by getting back to basics. Whether a novice , professional, or somewhere in-between, these books will provide the advice and strategies needed to prosper today and well into the future. For more on this series, visit our Web site at www.WileyTrading.com. STOCKS THE WALL STREET WAY A Proprietary Method for Intra-Day and

Josh DiPietro Copyright c 2015 by Josh DiPietro. All rights reserved.

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Library of Congress Cataloging-in-Publication Data: DiPietro, Josh, 1976– Day trading stocks the Wall Street way : a proprietary method for intra-day and swing trading/ Josh DiPietro. pages cm.—(Wiley trading series) Includes bibliographical references and index. ISBN 978-1-119-10842-9 (cloth) ISBN 978-1-119-15050-3 (pdf) ISBN 978-1-119-15049-7 (epub) 1. Day trading (Securities) 2. Electronic trading of securities. I. Title. HG4515.95.D567 2015 332.64′2–dc23 2015019105

Cover Design: Wiley Cover Image: Wall Street Buildings c JavenLin / iStockphoto

Printed in the United States of America 10987654321 CONTENTS

Author’s Note xi Three Essential Prerequisites xiii Introduction xv Discovering Day Trader Josh xxv Acknowledgments xxxvii v

PART I MASTERING YOUR MINDSET BEFORE YOU ABSORB THE SYSTEM BY DAY TRADER JOSH 1 LESSON 1 Control of Emotions and Mastery of Focus 3 LESSON 2 How Overconfidence Can Destroy Your Trade 6 LESSON 3 Dealing with Your Impatience 8 LESSON 4 Knowing When to Stop Trading 10 LESSON 5 Risk Management: Buying Power versus Capital 12 vi CONTENTS HPE ai rcdr 45 2 CHAPTER Procedure Basic D 1 38 CHAPTER 28 33 26 II PART Broker Online Right the Picking Why and Trade to Stocks What 14 LESSON Averaging to 13 Comes LESSON It When 20 Noise versus News 12 LESSON Rules! Consistency 11 Is LESSON Trading Day Stop-Loss at 10 Look LESSON Realistic A 9 LESSON to Way Your 8 Budgeting LESSON Market to Overexposure 7 Avoiding LESSON 6 LESSON Prior htt oAtrYuHv orLs of List Your Have You After Do 53 to What Logged Levels Price Daily Your Get Candlestick One-Minute of Basics The Levels Intra-Day Forming 45 Should You Why Reasons System Additional My with Trade to Stocks Best The 31 15 18 Beware! Amateurs Down, Profitability Risk T RADING AY rc ees68 67 55 Levels Low Price Daily and Levels Price High Daily Organized and Reading Chart 49 Trade Each on Cents 15 Only Take T rc eesadNewly and Levels Price RADER M ETHODOLOGY J OSH Not ’ S I abig23 NTRA -D AY 43 CONTENTS vii the Opening Bell 70 Before Price Levels on a Prior Orders) 100 Limit End-of-Day Trades with Back-Testing 102 Quote Chart (Direct Access) 97 Order Execution 96 Exit Strategy with Step-by-Step Procedures and Guidelines 88 Static Profits 86 with 100-Share Block Trades 84 of the Lessons to Come 76 Candlesticks (Chart Analysis) 75 Counting Process 74 Whiteboard Executing Real-Time Trades (Manual Scrutinizing Both Real-Time and Placing Orders Directly from a Level 2 Entry StrategyExit StrategyThe Wisdom of Using Strategy Stop-LossExecution 92 Using Your Keyboard Keys for Rapid 90 91 96 Observing the Framework of Entry and Understanding the Wisdom of 15-Cent Entry/Exit SetupsThe Rules ExplainedMastering the Three-Tier Max Strategy 78 79 Notes, Reminders, Cautions, and Hints How to Count Five Minimum Log Your Now You Start the Five-Candlestick CHAPTER 4 The Mechanics of FASTKEY Order CHAPTER 3 Intra-Day Golden Rules: viii CONTENTS HPE apeFso rd eus150 Setups Trade Fusion Sample 8 CHAPTER 139 Trading Fusion to Introduction 7 T CHAPTER IV PART Trading: Swing to Introduction 5 CHAPTER D III PART HPE apeSigCatn eus124 Setups Charting Swing Sample 6 CHAPTER ia od nFso rdn 169 156 152 Trading Fusion on Words Final Advanced An #3: Trade Fusion Sample #2 Trade Fusion Sample 144 #1 Trade Fusion Sample 140 Options: Trading Your Deciding Rules Golden the Applying Exclusive? Mutually Not They Are Why 118 the Here’s Experience Trading and Power Buying Follow to Rules Swing Key Two Setup 111 Exit 109 and Entry Understanding Swing First-Tier the Determine to How Rule Hold Ten-Day the Introducing Procedures and Rules Basic wn rd eus129 126 Setups Trade Swing Bubble Percent 5 The S M WING HE AY uinTae160 148 Trade Fusion Fusion? or Only, Swing Only, Intra-Day 115 112 121 Strategy Swing Your Dictate Rules Level ETHODOLOGY F T USION RADER S TRATEGIES Good OF J OSH es 122 News! I NTRA ’ S S -D WING YAND AY T RADING 107 137 ix CONTENTS 187 171 AY D ROCEDURES P RAINING WITH T ULES AND R OSH J DVANCED RADER RADING AND T It WorksProgramProgram DetailsLearning ObjectivesWhat the Price IncludesRecapAbout the Companion WebsiteMy Final 189 Words to Readers: Warnings, Reminders, and Prospects for 200 the 196 197 Future 199 195 Index 201 199 207 Minimizing Losses on Overall Trade SetupsWhat Is Pivot Trading?Sideline TradingEarnings Release Trading 175 173 181 178 CHAPTER 11 The Day Trader Josh Training CHAPTER 10 My Trading Room and How PART VI T PART VCHAPTER 9 A Maximizing Net Profits and

AUTHOR'S NOTE

Caution! Alone, this manual will not adequately teach you my intra-day trading and swing methodology. Your mastery of my system will only come about through formal hands-on training. Much of what you’ll find in this sequel is material from my training xi manual. Graduates of my program will tell you that there’s much more to learning my system than reading text or looking at one-dimensional charts. As with any other line of work, mastery requires your guidance for weeks, if not months, by a veteran. If you think you can simply read about a method and then apply it to real markets with success, then you’re in for an ugly shock. I say this because I’ve made that mistake, and I don’t want it to happen to you. In my first book, The Truth About Day Trading Stocks,Idiscuss the harsh realities of applying a new method without any hands-on training. Whether you’re a greenhorn or you’ve been trading the markets for 20+ years, getting the gist of any real day trading system demands more than just reading a book or watching a few day trading webinars or seminars. So I repeat: don’t attempt to trade any of the procedures and/or rules mapped out in this book. This is only a framework meant to give you an idea of what’s ahead. This is the map, not the road. xii AUTHOR’S NOTE ilol aetemtra htmc adrfryusl ofully to yourself enjoy! for and you here harder sections, from much certain reading start to that manual. please Cautions jump material So the and digest. technical the order with make of a starting only out order, as read will in do read read you If to to page. critical book is this material All designed specifically I ■ n lohwmc sinvolved. is much how also and ihara a rdn coach. training trading hands-on day of real weeks a with requires trading This you real competency. as any play your with into develop come As procedures year. real-world full and one applications system, for lasts program training my ahow-to yga eei oso o htm ytmcnd o you, for do can system my what you show to is here goal My ontatmtt rd ihti ytmwtotfra riigfo me from training formal without system this with trade to attempt not Do oNtRa u fOrder! of Out Read Not Do hsbo syu nrdcin tsmatt eelwhy reveal to meant It’s introduction. your is book This . hssse snteasy not is system This . hsbo snot is book This . THREE ESSENTIAL PREREQUISITES

1. Don’t perceive day trading as a quick alternative to make fast cash. You go into this as you would in any serious attempt to take the time and make the effort to learn a real profession. 2. If you’re planning to trade fulltime, you need to acquire a pay-per- xiii share broker. This is a broker who charges no more than $1.00 per 100-share . (Note: If you’re only planning to trade part-time, and you’ll be focusing on swing trades that produce more profit potential than intra-day trades, then most pay-per-trade brokers will suffice. You don’t have to consider changing online brokers until you’ve been formally trained.) 3. You do not need to open or fund a live account while training with Day Trader Josh. Once you begin to real-trade, however, you will need a minimum starting balance of 25K. This amount is a bylaw imposed by the SEC. When you’re intra- day trading stocks, and you’re placing more than four roundtrip trades in any five-day rolling period, you’re considered a pattern day trader. As such you must fund your account with no less than 25K. xiv THREE ESSENTIAL PREREQUISITES hsmasyucnttaeo agno atr a rd ni you 25K. until to trade balance day your pattern return or to funds enough on deposit trade can’t you means This fyu aac al eo htaon,yugthtwt an with hit get you amount, that below falls balance your If o ontne ooe rfn ieacutwietann ihDay with training while account live a fund or open to Josh. Trader need not do You qiycall . INTRODUCTION

f you’ve read my first book, The Truth About Day Trading Stocks, then Iyou’re well-prepared for this new, more technical application of my trading methodology. Before you get started, all you’ll need is awareness of the updates and modifications that have been added since xv 2008, and that vital information is here. For those who haven’t read The Truth About Day Trading Stocks, I recap the book’s major lessons in the first part of this book. I designed this second book specifically to disclose my proprietary applications to intra-day trading stocks and swing trading stocks (equities). I have been trading since 1998, but I learned most of the applications here while trading on private equity floors near Wall Street. After I disengaged from private equity trading floors I began my own unique system that works for the relatively lower-capitalized independent day trader. After eight years of testing and trading with a high rate of success, I finally designed my own highly transparent trading system. In this book I show you precisely how I trade stocks by using both intra-day and swing strategies, and most importantly, by using their fusion. You will be introduced in Part 4 to my new term, Fusion Trading. What is Fusion Trading? Think about it: you can’t place an intra-day trade without knowing where your swing levels are. Conversely, you xvi INTRODUCTION wn rdn ytm n ihu nwn o ofs them. fuse to the how knowing knowing without without that strategies and assume system, and trading not rules swing to intra-day crucial the it’s trade can why level the you learn which and You’ll you procedures trading. show several intra-day I learn of basis. You’ll that why. on and trade, to to your need you with because rhythm intra-day, in with get start you that critical It’s system. to trying system. my I’m outcome trading the and is about who care exists anyone do guy I for one. that that another online becoming know from posts you I then prevent work. and portion, money, doesn’t one loses system tries system, my who my of guy percent that 1 be say Don’t here. learned framework the to of followed be Hundreds must system. procedures current to and intricate rules prerequisites my are of framework These the psychology. learning trading your into Stocks hardwired Trading Day About Truth alSre rc ees ogesok oidctr—ohn but the indicators—nothing to secret no the guesswork, and no real system levels: my price levels. of Street intra-day core Wall your the considering is interconnection without That trades swing place can’t o aeyurayt s t yga eei ohv o ietthe digest you. be you trained can’t formally have that I’ve to potential will after a is until success, system here realized for goal the potential My the about it. see and reading use information to Just ready mistake. you huge make not a be would That level. each at shares many how and you, for best ieudre ate orlyufracul fdy,adte throw then and Street. days, Wall of of in couple wolves you the a those to herd for of you you card, victim corral credit a cattle, your underfed once gouge like was that I programs plummet. training or big-box profit who mentor you trading whether one am cares I Burn, & Crash life-shattering of survivor hssse sntes olan htswyti ytmworks. system this why That’s learn. to easy not is system This nPr ,Iitoueyuto you introduce I 2, Part In the only with trading live real, is disaster for potential biggest The o a etmtdt pl htyulanhr olv trades. live to here learn you what apply to tempted be may You nPr ,Iadestepraet rnldfclpit of points focal ironclad permanent, the address I 1, Part In here. happen won’t That a As overstated. be can’t training hands-on of importance The rc ees orcalnei oko hc rc eeswork levels price which know to is challenge Your levels. price o’lfidisrcin htms be must that instructions find You’ll . only h nr-a oto fthe of portion intra-day the T . mechanics The INTRODUCTION xvii . . The Guy : applying trading from the sidelines poor training factor . I use this method to recapture any incremental pivot trading In this part I also show you what I call This part gets into what I call the Sorry, I remember my own foolishness,This so part I is know an it eye-opener. has I to show be said. that there are so many variables In Part 6, I demonstrate several examples of how you can easily The most risky time of year to trade, especially when you’re not In Part 5, I offer several advanced rules and procedures. One is In Part 4, you will be introduced to Fusion Trading. I show examples In Part 3, you’ll learn the core swing trading methodology. Again, losses in one single tradingmy day overall due . to I a show stop-loss youI exit how, get at on right the a back very portion next in of trading at session, the same level or better. that it’s suicide tocan’t apply apply certain this rules systemdifferent across in actions, the and static you board; have mode, certain to meaning, situations change price require you levels in real-time. screw this systemMymaingoalinthispartistodrivethepointhomethatthissystemtakes up by throwingweeks if certain not months of rules training with out meIf before you it the are were ready up to window. go to live. me and not my editors, I would title this part: formally trained, is earningsexhibits season. extreme Four . times Ithat a have can several year, help strategies your you and capitalize stock normal procedures on day-to-day huge swing runs, trade. earningsafe I far and on more also the than establish sidelines. the rules that keep you In essence this is when youbut have for a whatever predetermined reason entry you price missed inlower the mind, or entry, higher and in then your the favor. pricescenarios What goes and do options. you do? I demonstrate several Who Thought He Could Trade This System without Being Formally Trained what I call of several trade setupsboth that intra-day and illustrate swing howseveral trade options, important strategies. such it as You’ll intra-day is find tradingintra-day only, to that trading swing and you know trading swing only, have trading or on the same day. you’ll see why you can’t use onethe strategy other. without thoroughly The knowing fusion of both is shown later. what you can’t learn on paper after only having tried it on paper. xviii INTRODUCTION nr-a eus sIddi 08 ’ebe ople ooin my orient to compelled been positions. I’ve swing 2008. toward in more much system did moving smaller I the been as primarily trade setups, have longer intra-day no stocks I factors, liquidity, those of and Because before. faster. volume ever than high market to stock FED the Due zero-interest-rate in volume virtually more created the high- has policy of and proliferation systems the trading with combined frequency This when history. 2008, in Since market bull regulations. and/or rules published I in market to changes adapted and and updated be trends must system trading day viable Any ■ shows actually a that room are trading a They and part. this in mapped hands-on sight. are any gory without mistakes into Those get you’ll experience. can trouble you much so mistakes, how make imagine still just program one-year my in trainees Even smnosi rmadytaigvtrn gi,ti oki not framework. is the at book money. look real this a with system you Again, my offers applying It veteran. start to trading you prepare day to designed a from mentorship is does. program live training for one-on-one you this my prepare in how can’t show them here I address material and the I trading, that questions. repeat gazillion I trade a and to have section, may it You using works. it you’re when expect to what system. and my works it how understand. you’ll 6, Part After sense. make to explaining much does shares of amount certain a and not level because price just certain instance, a room at For entering system. trading I’m the a mastered following yet of haven’t you danger when the see you’ll importantly, Most nPr ,Iso o h ifrne ewe ou rdn room trading bogus a between differences the you show I 6, Part In h nytu a ogtyu usin n ocrsanswered concerns and questions your get to way true only The how and program training my at peak sneak a get you 6 Part in Also explain and room trading own my of screenshots you show also I enta o hudd ieiea hteattm.Ti takes This time. exact that at likewise do should you that mean ok(2008) First Book My Since Updates and Changes h rt bu a rdn Stocks Trading Day About Truth The all nr levels entry ev entebiggest the seen we’ve , before hyhit. they INTRODUCTION xix be trading not on any given day. . Fusion Trade . This is the trading of strong swing when trading stocks between $100 and Fusion only between the intra-day high and low with intra-day levels. I have you observe the strongest mean that you, as a beginner, should only does not Now I primarily swing trade— My new system works $250. This Unless you have your own trading group and black box (high- High-frequency trading systems have basically taken over Wall Because I’ve altered my system, and because of the higher price Even under my coaching, and especially when you first go live, ■ ■ Changes and Updates Summary Those levels simply are not dependable anymore—theyto trade. are very risky levels in conjunction with theto strong trade intra-day this levels. way It’s now. muchnow I safer still are trade very off defined intra-day‘‘intermediate’’ levels, intra-day and but levels. strong what Those intra-day I are use levels.that the I are newly no created forming longer levels trade intra-day levels. In this book asyou well to as start my training program, I instruct frequency trading computer with directpowerful access trading to Level software), 2 and quotesthen millions, you and have if to tread not very billions, carefullyThis when of is trading in why dollars, this I new market. invented the Street. For the smallas dependable guys, as this before. means Bytrader. You ‘‘small the have guys’’ to I intra-day be mean levels moremore the conservative extreme. are now average and novice not the levels you pick levels on the typeprice of stocks criterion I to nowI look a elaborate for, on minimum I’ve this later. increased of my $100 stock and a maximum of $250. I’ll have you trading only intra-dayto setups. riskier Eventually you’ll yet graduate moreonly profitable take baby swing steps. trades; meanwhile, you should levels, but for the time being,reason do nothing for more this than watch. isovernight. The It main safety. makes no You sense won’t to do be so and holding it’s intra-day way too positions risky. xx INTRODUCTION rd ni o aemr xets.Yul aevr itei profits, in intra-day little very only make should You’ll you expertise. more beginner, have a you until As trade system. current intra-day my of proper part blind. your the leading pick blind to the like order is in two need the levels you Separating and levels. swing entry, your swing precision know a your get to know to to order need in matter you levels a how: intra-day As Here’s other. interdependent. systems each they’re both complement fact, using they of you started much I while how while hit. found strategy to I that, good trades because swing is a stronger remains now the price for trading clarify dependable wait intra-day to and trade, profitable want to more I the level become What has on. trading later swing detail in within that you’re whenever trading intra-day rules and so. levels do price can the you if that dictate only swing system and Only my way, portion. in that won’t swing handled you the be system, learn can this you trades to until new overnight you’re holding If be ironclad. remains rule that not ■ ■ ■ ■ ■ ■ ■ osilueta ytm u o nyuiieseicpielevels. book. price this specific of part utilize intra-day only the I in now explained but be are will system, system. This that levels setups use intra-day three-tier still established normal do my I the with that dependable realized longer no I when trading swing h hn oke nmn sta wn rdn stems advanced most the is trading swing that is mind in keep to thing The start can you level, swing your know you once that found also I’ve In started I system. my to change fundamental most the far by is This o rmrl wn trade. swing primarily I Now setups. intra-day for year. Rules’’ ‘‘Golden full offer one now to I weeks two from grown has levels. program price training earnings My off earnings, after $5 day cases the some trade now $1.50—in I least at for run to profits allow I but overnight, positions hold now can I h Breakdown The holding h rt bu a rdn Stocks Trading Day About Truth The vrih.Isaeti tlat5 ie.Frtebeginner, the For times. 50 least at this state I overnight. testeiprac of importance the stress I , only roughly fImi wn trade. swing a in I’m if 3o t explain I it. of $3 + . INTRODUCTION xxi Fusion for practicing waiting all day like only , I stress the importance when trading stocks between $100 and only The Truth About Day Trading Stocks . I introduce you to my full system in Part 4, which details my My new system works $250. The most consistently traded stocks are priced in the $100–$250 I get this question all the time from traders who are reading my Think about it. Low-priced stocks only have intra-day price ranges As I mentioned previously, the bull market has pushed most of the Mastery means you’re swing trading, or what I like to call of starting with $10$100. stocks This and working is your for way up intra-day to trading $50, then only, and range. We day traders know consistencyqueried is about everything. this, If here’s you’re a ever over good $100 simply way because to they respond:most move ‘‘We importantly, fast need and because stocks have they’re highstocks very volume, over liquid. and $250, And because we they don’t move want too fast and take up way too first book: ‘‘Does your systemrespond still that work it with has $10 never stocks?’’ worked, I not always unless you of 10 cents to atthis most system $1. with You stocks priced would under not $100.need make Not to much to trade mention more at you than all would 100 if sharespay-per-share on trading commission each position, through thus the driving your roof.to Again, trade teaching with trainees $10 stocks is only for training purposes. when demo trading. (Evenusing $100 in stocks, that but original thatThe training entire was theme because program of I my I knewrisk first was as book how you is to learn, about trade especially keeping if them. you you’re safe not with under low my mentorship.) for a 15-cent profit ($15).that Some in third-world one citizens day! earn more than stocks that work with my systemhad to to well adjust above it $100. to Therefore,$250. I’ve work In with higher-priced stocks between $100 and Trading new and time-tested Fusion Trading system. ■ and you’ll run the risk of havinghave to you stop-loss safe at than the close, sorry, but andmy I’d not system. rather holding overnight, until you master xxii INTRODUCTION aeecpin r h eesta aefre na on formed have that levels the are to exceptions meant are safe levels formed newly those htt onx,atrte’ehl ekitadypsto trades position intra-day weak say: held always I they’ve what after Here’s overnight. wondering next, out, do hair their to tearing what while me contact program training out. further even or held day be next the can profit circumstances a certain for under overnight that levels points strong pivot Those proven days levels. are price several resistance for and support held strong have form to that levels established previously meaning overnight o o’ att tep ynwsse ihra oe ni I’ve until money you. real coached with properly system and new formally my attempt to want enough: don’t it You say can’t I Meanwhile, many in and level intra-day an than stronger cases much are levels Those tre ocigitadytaig h term The trading. intra-day coaching started I ■ ■ range. book, that this in of stocks portion the stock-picking pinpoint the I During capital.’’ our of much tawell-established a at you now by Hopefully laugh. trading. and back intra-day look of can Rule Golden the broke 15 iiu rfi nataeol etist wn position. swing a to pertains only trade a on profit minimum $1.50 tpls o—o cee p ieteble n don’t and bullet the Bite up! screwed now—you Stop-loss again. a’ elyuhwmn ie ’ehdgautso yoriginal my of graduates had I’ve times many how you tell can’t I e,wt yugae ytm o otefridn you forbidden: the do you system, upgraded my with Yes, sIv etoe before, mentioned I’ve As u eestetig fyulant pl ynwsse,entering system, new my apply to learn you If thing. the you here’s know But you this, reading are that done have who you of any If hsudt spet tagtowr.Irepaieta the that reemphasize I straightforward. pretty is update This lo rdst u o tlat$.0i rfispr10shares—in 100 per profits in $5.00 $1.50 cases least at some for run to trades allow I overnight positions hold now can I should o uthv oko hnyucn n lrf hslater. this clarify I and can, you when know to have just You . ehl overnight. held be + . swing rc,te h uen ograpplies. longer no Rule the then price, holding hsnwbo sol h framework the only is book new this vrih a uen-owhen no-no huge a was overnight only only fImi wn trade. swing a in I’m if atta a.Teonly The day. that last intra-day ever daily asi all: it says othat do chart, hold . INTRODUCTION xxiii after an earnings release. Yes, I wait till after on the trade, and then you have to stop-loss because + can be a profit. For instance, trading strong levels + My training program has grown from two weeks to one full year. I now trade the day after earnings, off earnings price levels. When I mention huge gains it’s exciting, but if you don’t use this Because the most risky time to trade is earnings season, I decided Accordingly, here’s one part of the Golden Rule that hasn’t changed, Of course, I can only show the framework here, with only one If you don’t have a solid trading system in place, and you don’t I never hold a position overnight into earnings release. you picked the wrongamount levels of at shares. the It wrongless took profits, time and me and how years had manycome to shares the into at learn wrong play. certain when levels. I to So chartto many the take you variables majority to more of remember or that them this in is this just book, the but map, it’s not up the road. system properly—don’t haveeasily it lose taught $5 to you properly—you can earnings release can be very lucrative. that the best way to help you master my system is to have you and never will: example, and that’s likehuman is showing its aliens clone. a Thedifferent speeds, point human so is: and you each really saying stockthere have trading trades every to off differently know earnings. and your at stock if you’re out Wall Street decides what the highest andearnings lowest release, price will and hit then just after IThis trade is off the only those time price you levels can the capitalize next on day. much larger profit runs. stick to your rules,dangerous then times earnings to release befor trading. dates trading Though are during I by earnings have far season,you an the my to established new enter most system swing a system trade allows the for day ■ ■ Again, only swing tradesThe new can swing profit levels more you’llstrong see than levels, in 15 this enabling framework cents you willcases per to be $5 sensibly trade. extremely take more profits. In certain xxiv INTRODUCTION n hntk nmre ras a coltkstreyasfor years three takes ■ school Law trials? murder reason. on a take then and training. formal fast-track on no time is real There in exits. and me entries questioning setups—both and my rooms trading trading live that my of my months under watching now with while skills comes And gain system stop. to this of months to Mastery have supervision. you you longer, at much yelling lasts program literally my without window. not the out rules wiped my half season threw earnings they (2) (1) and/or downfall: common out, two their them that to likely found led are and have several wing tend surveyed denominators my I’ve they under well. better stayed so the haven’t doing me, not who however, with graduates believe truth, remain Most The simply trainees do. most own. my to or their that longer fee on the found tuition it that and do is my to year, pay enough whole to learned a they’ve want the for don’t In coach either training. core to traders entire offered the I’ve covers that past program finally six-week and the program, four-week in my in then program, two-week initial this getting with struggle four still correct. graduates these period my active Even during most markets. the coaching the is in season my earnings time doubt, need a you Without year. ten, each periods or you’re four stock Whether receive one dates. you way trading release That earnings year. with entire experiences an real-world for program my in remain ni tpot,o ilke o u n aeo h sidelines. the on safe and out you trade keep a will in or you profits, keep it will until directives easy-to-remember and these olwessueetertann nomal orwe courses four-week measly into training their squeeze lawyers Do mistakes, those make don’t you watch, my under trading When my in some training, my under been already have you of Many ilb xliigtenwGle ue nPr .Essentially, 2. Part in Rules Golden new the explaining be will I fe odnRlsfritadysetups intra-day for Rules Golden offer I DISCOVERING DAY TRADER JOSH

■ How I Trained, and How I Journeyed Closer to Wall Street

My journey began back in 1998, in sunny San Diego. I caught a xxv free trading seminar and learned that it’s possible to sit in my shorts and make tons of money online, buying and selling stocks at home. I opened a traditional online day trading account through a prominent pay-per-trade broker. Back then, I was paying about $14.99 per trade. I also found out how easy it is to lose a lot of money very fast. I began searching for day trading academies. I purchased every relevant book I could find. I was desperate to learn how to profit consistently. I found a three-day intensive trading program in Irvine, CA. It cost $6,500. It offered no guarantees, but the lunches were free! The trader/instructor who sold me over the phone was very convincing. He promised I would learn some proprietary information that would catapult my day trading to glorious new heights. After the three-day program I came home to my trading station. At the time it was two laptops and a 36-inch Gateway monitor. I felt like a truly professional trader. My confidence level was through the roof. xxvi DISCOVERING DAY TRADER JOSH htIhdt elm os.Ias lotls yfianc my lost almost also I house. my sell to had I that iso tutr.Ta a iln e a lcn vr1 roundtrip 10 over placing was I me. killing was That structure. mission their in 25K least trader.’’ at day have ‘‘pattern to traders official accounts. day brokerage an pattern all as requires me SEC The was defined was I activity period. where rolling period much five-day to any that This got in trades I from roundtrip four functions. got than truly more I trading market stock thing the best how broker The learning pay-per-trade platforms. a with trading successful and moderately was I 2006. until know. already didn’t I that ripped-off. anything completely felt me I teach didn’t program The Irvine. to up drove consistently equities. profiting I trading of way in again structured highly a Once taught be promised). to expected I they so (or program the from day academy current trading second one). different few my first (a on a $5,000 program another purchased trading out dish professional I to decided chance. and books, another trading trading day time most patient. person—and more resourceful helping all, more were of and college smarter of much rigors a become The me State. Diego San from Marketing in back get to decided intra-day. I trading actively until again, money, much consistent made especially never I money, hiatus. three-year my during trades ‘‘guesswork’’ day actively pay quit years. and to three business order about detailing in for car trading myself mobile for a started business I small bills. of the kind some for searched I omk ogsoysot ots uhmnywti n year one within money much so lost I short, story a make To a opolmwt ht ypolmwstepyprtaecom- pay-per-trade the was problem My that. with problem no had I account pay-per-trade traditional my with worse. trade day even to was continued I it time, this And down. let was I again Once trading professional and intensive five-day a was program This full- give to me encouraged this and money, some into came I Business in degree bachelor’s my up finishing was I 2004. was It several place did I and account, brokerage online my maintain did trading. I day full-time from break a take to had I mess! a was I ee. ´ DISCOVERING DAY TRADER JOSH xxvii . . Fusion Trader Everything I know to date is in this book is the specialty of taking profits on small price Intra-day trading Most of the independent pay-per-share trading firms were on or They each had different criteria for entry and different capital invest- AtaboutthesametimeI’dgotintenselycuriousaboutthedaytrading The year 2006 was key. That was when I began to seek out changes, generally soon after a tradeprofitable. has been It entered requires and has you become tolarge have loss a could strict eliminate exitto the obtain. strategy, many because small one gains that you’ve worked I am defined asmentioned an before Intra-day I now trader call and myself a a Swing Trader, but as I’ve My Style of Trading: Both Intra-DayTrading—The and Fusion Swing of Both near Wall Street,Manhattan. so Now I lived I 30 blocks sold awayaway from by everything Wall those Street. firms. I I They was all blown owned hadof their experience own and of trading the floors. relocated The day caliber And traders to the there made truth me is, feelI compared like was to an exposed those amateur. to real veterans, daymore I than trading I was. firms had and For in real all two years day prior. years traders. I learned ment amounts, but they all hadranged the from pay-per-share 30 to structure—the 80 fees cents perto 100-share block paying traded. That only translates pennies100-share on block the trades because dollarthe I for time, was each $50–$100. trading trade. stocks I highly only priced at needed firms in New York City. Some ofthat them was offered a unfamiliar commission to structure me: pay-per-share.per-share, The the more more I I researched knew pay- Ithat there had were to literally move hundreds of to small, Newtrading independent York floors. private City. equity I found pay-per-trade firms with much cheaperThe lowest per-trade I commission found costs. was $4.99 per trade. That was still too high. trades per day. That’s 20in executions commission per fees day. That per translates dayto to ($9.99 trade $200 per without trade). getting I charged needed so to much find per trade. a way xxviii DISCOVERING DAY TRADER JOSH o 5 (or orpot ornfrhrbcueyu nre r f extremely off are entries allow your you because levels. Therefore, further price overbought/oversold run levels. to intra-day profits than your levels stronger much h hrsaldy ac n rd a of max a trade and watch watch I I then day. position, Swing all a charts enter/exit the to looking I’m if But hours. aaiiis hsmasyucnueyu ro esadfunction and keys arrow your use can you execution means order This FASTKEY execution capabilities. offers order fastkey Lightspeed my access). for market platform (direct trading Lightspeed the use I Feeds Order Data for and Use Execution I Provider Access Market Direct The the you. master trained you have levels; once I swing swing after trade toward system gravitate primarily eventually currently will I too, that you, find will You strategy. simultaneously. which place, stocks will you five trades profits. more more of the generates max trade, can a you stocks and more The four, three, two, trading only be will that factors book. this several in on on later depending addressed varies accumulate I levels stocks). my all day trading productive (when trades a about roundtrip place 30 On will or I levels). trades) executions, swing 60 swing and intra-day both hits with day it shares all 300 (trading if to grow more to position (and a allow maximum will I blocks. 100-share in tions to (up o ee oda nr-a rd overnight. trade intra-day an hold never You oiinmsl tm rd tto ahmrig triga 8 at starting morning, each station trade my at myself position I trading Swing nti okyuwl elann ohm nr-a n swing and intra-day my both learning be will you book this In with learning and practicing be will you program, my In price many how and shares of amount the trading, swing When posi- trading my start typically I trading, intra-day I’m Whenever neyur nyu w,yuwl vnulypors to progress eventually will you own, your on you’re Once . A.M ten nteWs os) sal rd nytefis two first the only trade usually I Coast). West the on . o swing). for sbsclytaigoflvl on ntediychart, daily the on found levels off trading basically is five tcsprsession per stocks n stock one A.M. DISCOVERING DAY TRADER JOSH xxix : pattern day trader You can place as many intra-day trades asYou you should want. be paying $1 or less on each 100-share block trade. Initially, you’re given 4:1$25,000 . and You you have open $100,000 your in account buying power. with Here are the main benefits to being a Either way, you don’t need hundreds of thousands of dollars to When it comes to intra-day trading, think about it: if you’re trading Most important, Lightspeed has a pay-per-share structure. Lightspeed also has all the data feeds you could possibly need. ■ ■ ■ become a professional day trader.$25,000 By to SEC open regulations, an you account. only need a $100 stock intrade that 100-share position. blocks, If that’s then5 not stocks you enough, at then only once, you and need maypositions. then $10,000 want you to only to trade need $50,000 to trade all similar As both an intra-dayof trader trading and options. swing The trader,little benefit I trading of capital enjoy intra-day is a trading neededWith good is swing in that range trading, order however, relatively to the dayI sky have is trade to the stocks/equities. invest limit. determines How thewill much amount be capital of explained shares in and greater price detail level. in This the swing section of this book. The Amount of Capital and LeverageThis (Buying System Power) Requires Depending on your tradingfrom activity 40 cents you to could $1trading. be for paying a anywhere 100-share-block trade, great for intra-day It provides alllytical the indicators. basics, Basically,your Lightspeed such day is as tradingcommission-based a customizable needs. brokerage firm. one-stop-shop And charts for of and course, all ana- they are a pay-per-share (Fn) keys on your keyboard toframework place to orders FASTKEY (I order will execution be later teaching you in the this book). xxx DISCOVERING DAY TRADER JOSH rcsbekn hog h rvosdyshg n o rc before price low and stock high 9:30 day’s breakouts—pre-market the previous any the of through breaking track prices keeping also I’m stocks. screens. the across dancing start charts The fill. to akttaig neIgtu,Iuulyhv nhu eoethe before hour an have usually I 8 at up, opens session get trading I pre-market Once trading. wall. market the on whiteboard my That’s List. Trade Today’s my to it it. then trade swing headiness, will making but is it, trade stock intra-day my make not If or will stocks). stock, day. I select my that hurt I volatile potentially how extremely can learn that it soon news will any (you for looking day stocks I’m familiar given 10 any through to 5 on filtering about begin watch have usually I to I list. list. watch stock my my on for stock on best each TV. market attention the the the my is focus on digested I channel click I’ve news, business Once I this headlines. up, opinion, market-moving lit my observing all In station CNBC. trade watch my Finance I have Yahoo the I and Once Bloomberg.com like section. websites observations. browse news to market like current I my begin I coffee my having While t8:00 At oso h a pemre rcsaentlge nms intra-day most on and logged not highs charts). are the quote 2 prices of Level (pre-market documentation day true the a of have lows can I way, That trading. xct res o utpaete,satn t8 at starting them, place just not orders, execute r-akti 8:00 is Pre-market Trading Pre-Market it try should level broker. amateur pay-per-share the a at one through trading of advantage another sal aeu rud6 around up wake usually I Preparations Morning Early uigti eidImwthn o n bomlatvt nmy in activity abnormal any for watching I’m period this During l yerymrigpeaain edit h pnn fpre- of opening the into lead preparations morning add early I then my day, All this on normal trade should stock the that deem I If aial,Ine olgwa rc eeshtdrn pre-market during hit levels price what log to need I Basically, otaaer n vnnvc rdr o’ elz hycan they realize don’t traders novice even and amateurs Most A.M A.M n ulVrulTaigDywt Day with Day Trading Virtual Full One h ee ut hrssatt oeadodr begin orders and move to start charts quote 2 Level the . opening. . rdrJosh— Trader A.M .to9:30 A.M nr-a Trading Intra-Day . .(5 A.M A.M A.M ,bfr h pnn bell. opening the before ., EST. . fo h etCoast). West the on if . A.M. S.Ti is This EST. u no But DISCOVERING DAY TRADER JOSH xxxi P.M. intra-day only entry/exits all day, my trades, but you, make 15-cent profits all intra-day trades past the swing always if I feel like it. This is different I am locked and loaded. I know never hold P.M., A.M., begin my trade in 100-share blocks, and I’m using to execute trades for each of ., although I do place always A.M intra-day trading, I usually place at least 10–20 trade. on each intra-/swing trade, on price levels ., I’ve executed about 10–20 trades. I usually take a + A.M swing actively In Part 4 you will learn my Fusion trading system. I actually Keep in mind: about 75 percent of all intra-day trades happen in If I’m Around lunchtime I wind down. I close all my positions and take Once I have taken my break I begin some research on my perfor- My trades are quick and decisive. I now take exactly $15 (15 cents) Note: Once I quickly execute a trade, I am quickly looking to exit with if applicable. the first two hours of the market. This is why I now if I’m in a trade up to 11:30 exactly what my selected stocksprice (you levels). will soon learn how to determine these EST. I will begin again around 2 The Opening Bell When the bell rings at 9:30 my break, usually 45 minutes. I tend to stop trading around 12 mance. I’m gauging whichand stocks which I stocks want I to planhave stop been to trading consistent continue in for trading. their the I volatilitybe and day choose described price in the movements greater stocks (this detail will that later). quick 10-minute break after I’ve closed out all positions. in profits onshare closeout-full each position, intra-daysetup then trade. profits trade, But are meaning, I $45 on if the I three-tier have a 300- roundtrip trades in the firstand focused hour during of the trading. first I hour of like trading. to be high energy this is how Isimultaneously. will train you. In the morning, I trade 1 to 5 stocks Midday Activities By 10:30 on intra-day setups. make $1–$2 a small profit (using FASTKEY). I as a beginner, will takebe thoroughly 15 explained cents later on on. intra-day trade setups. This will close (unless it becomes a swing trade). I xxxii DISCOVERING DAY TRADER JOSH rdn iecokokIwl tc ihutltebl rings. bell the until been with has stick stock will Whichever I day. clockwork all like stock trading performing best my for hour ii yepsr vnmr ynttaigmr hn100-share 4 at than rings bell more the when trading way, will not This time. I by given any hour than more at final blocks more even in the exposure trade During my never trades). limit I intra-day because (on this blocks about 300-share worry to have don’t I ftaig fe 3 hour last After the during trading. volatility and of volume up picks usually market The Trading of Hour Last The trading swing be noticing may begin I two. I Again, or day stock stocks. a few the a for in trading picks trends After stock consistent close. fairly original the my into all leading stocks watching three and to one only trade to osmlf h cenn rcs yuiiigtefloigessentials: following the utilizing by process screening the simplify to performance. my for recap positions to my time all it’s of then call out day, to closed the like completely I I’m floor, trading After the homework. on it or home from working I’m Whether Homework day. the for course performance of profit/loss And, my how gauge stocks. watch to other to like like and I I markets hours. the after affects in trade news stocks after-hour my how watch to like I done. is workday The Ding-ding-ding-ding! Bell Closing The position. block 100-share a out close to need only ■ ■ ■ ■ ■ h e otels oro rdn is trading of hour last the to key The fe uc sal eiet hre ysokwthls.Itry I list. watch stock my shorten to decide usually I lunch After ieo entry of Time position Long/short shares of Amount Total trades individual on purchased shares of Amount symbol Stock tr yfcsn ntebs n h os rdso h a.Ilike I day. the of trades worst the and best the on focusing by start I hour. another least at for station trade my at sit always I not! is it No t40 S h . qiismresaeclosed. are markets equities U.S the EST 4:00 At P.M ,Imawy nhg lr.Isv h last the save I alert. high on always I’m ., o holding not n ag positions. large any P.M., Iwill DISCOVERING DAY TRADER JOSH xxxiii .ifon A.M (5 A.M. Swing Trading Trader Josh— One Full Virtual Trading Day with Day Was I simultaneously in more than one trade? Can I view the entire trading session onWhat one obvious screen? mistake(s) can I remember having made? Most important: Did Ithis use book)? the Golden Rules (learnedUpon later in answering these questions, I walk away feeling more in These days I research my intra-day trades and focus on the following Did I simply falter at the FASTKEY? Did I tier into the 300-share position properly? Did I hesitate on initial breakout and thenWas chase I trade? impatient and frustrated at time of entry? In order to be able to gauge your trading performance, you must go Was my original entry price the correct intra-day S/R level? Profit/loss Number of total trades Taking time to recap is crucial. It makes me slow down and think Time of exit ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ the West Coast).on The my biggest swing difference room is and that the stocks I’m that now are focused within $3 of hitting in control of my trading style.feeling better Now about I my can performance. relax and enjoy my evening, primary errors: back and research what happened at the time you executed the order. about my trading style. Tradingjust styles like have a to computer. be constantly updated, Early Morning Preparations Same as Intra-day, I usually wake up around 6 xxxiv DISCOVERING DAY TRADER JOSH dacdsrtg n o ob xctdutlyumse hssystem. this master you until executed be to be not and will strategy advanced I stocks the be likely today. most trading swing will Those trading. pre-market hte mitadyo wn rdn,we h elrnsat rings bell the when trading, swing or intra-day 9:30 am I Whether Bell high/low Opening The pre-market use levels. to swing how and intra-day you both showing trading when be after-market will day’s previous of I your high/low high/low. than your important meaning more bell, is opening pre-market into leading period trading will You together. book. come this levels in later swing why and learn intra-day both that frame screens. the across dancing start charts The fill. to wn rd,adte hr r asta omn eesaehitting are levels many so that days are have there I then and that trade, levels swing swing hit to others are than stocks determined. longer previously my still see, take But each. soon may $100–$250 will some priced you when depends As especially It volatility, stock. three day. highly to each every all two of almost as volatility levels much the swing as hit on in can levels others swing and hit cases. weeks, some not in will years, stocks for day, some every But trade I that stocks eight about have moment. this to my up in swing leading been days, have When for they levels). room because trading levels price online entry (you these my stocks know determine selected already my to I trading, of how each learn for soon trades will execute to prepared am I t8:00 At r-akti 8:00 is Pre-market Trading Pre-Market trad- of advantage broker. more soon! pay-per-share anytime one a just through is ing This Time). Standard (Eastern gi,yucneeueodr ntjs lc)satn t8 at highly starting place) rings—a just bell (not before orders execute swing can a you enter Again, will I to, decide I If o o utnt htpemre rdn stems relevant most the is trading pre-market that note just now For time- one the is this trading; pre-market watching certainly am I o hr r asIjs i n ataddntpaeoesingle one place don’t and wait and sit just I days are there So, typically I levels. swing my of none or all hit can I day giving any On A.M A.M ,Ia okdadlae.Iko xcl twhat at exactly know I loaded. and locked am I ., ,teLvl2qoecat tr omv n resbegin orders and move to start charts quote 2 Level the ., A.M .to9:30 A.M u o ilntb on this doing be not will you But ,bfr h pnn bell. opening the before ., rc levels price A.M . DISCOVERING DAY TRADER JOSH xxxv . + P.M P.M., profit target to + any large positions. (not necessarily full entries not holding should have traded at that same you magazine that explains how one trading room You will be taught in the advanced part of this book when/how Again: about 75 percent of all swing The key to the last hour of trading is You will be very educated on this one premise after reading this Unlike my intra-day system, with swing trading the sky is the limit Note: I might enter a swing level; you will be taught that you need to take Stocks & Commodities Last Hour of Trading This is the same asvolume for intra-day and trading. volatility The during market usually the picks last up hour of trading. After 3 roundtrip trades) happen in themidday first I two know hours the of likelihood the of any market. more So, swing by levels/tiers hitting. But, if I’m in ahit, then swing I trade will and be watching waiting the for price my action all $2 the way to the bell. I don’t have to worry about this because I never trade in more than I’m always on high alert.stock I all save day. the Whichever last stockstick hour has with for been until my trading the best-performing like bell clockwork rings. I will Midday Activities Like intra-day trading, byI midday am when done swing for trading, the day. chances No are more levels are likely to hit after 1 book: just because I’mnumber entering of at shares does certain not levels mean and with a certain once you master the entire system.when Again, formally mastering can trained only by be the done master of the system. shares on each tier? These questionsultimately are my the Fusion core Trading of system. swing trading and can actually be themake worst more thing sense for after a youhow novice read it the trader works. section to on use. my This trading will room and to trade each level. Fortier instance, should and you skip wait first for a tier? lower Should second you trade 100, 200, 300, or 500 $200 profits on each 100-shareswing block level. trade, I that like is, to a call $2 swing levels run ‘‘swing for tiers.’’ each level and same amount ofin shares. In the past, I wrote a feature article I miss a fewtrade opportunities, all levels. and/or my capital was not sufficient to xxxvi DISCOVERING DAY TRADER JOSH oeb o rdn oeta 0-hr lcsa n ie time. given any 4 at at rings blocks bell 100-share the when than way, even more This exposure trading my limit not will by I more hour final the During blocks. 300-share h wn omIa eapn h eesItae htdyadplanning day. and day next that for traded entries I levels my the recapping updating By am session. I trading room each swing of the room end the trading at swing updated fully My be trade. to needs swing every on essential is Homework next Homework my overnight. position know swing I a that holding critical am I It’s if room. tiers swing my and levels’’ ‘‘daily day. of the And, for performance stocks. profit/loss other my gauge and to markets like watch I the to course like affects I hours. news after in after-hour trade stocks how my how watch to like I hour. done. is workday The Ding-ding-ding-ding! Bell Closing The when trade profitable a maintain to trading. positioning strategies swing best several the you showing you be give will that I day. of period make-or-break learning. be hold soon must will you you rules dictates the position to your according if overnight especially made, be must that position. block 100-share hnsigtaig ti h aetigecp mudtn my updating am I except thing same the is it trading, swing When another least at for station trade my at sit always I not! is it No, the is it cases; most in hour first the as busy as just is hour last The decisions several have you hour, last the during trading swing When t40 S h . qiismresaeclosed. are markets equities U.S the EST 4:00 At P.M., ilol edt ls u a out close to need only will I ACKNOWLEDGMENTS

want to thank my graduates and current trainees who trade with Imy system successfully and inspire me to fine-tune my coaching. Because of you, this new book developed, with all the new charts and rules for your safety and even more gainful procedures. I’m also very grateful to professional day trading media outlets, xxxvii such as the MoneyShow and TradersExpo and Stocks & Commodities magazine. Over the years, they’ve been very influential in the growth of my networks with fellow day traders. And many thanks to Georgianna Groen. She colors my words with aplomb. Her editorship is superb. I’m a day trader, not a writer. We can all thank Georgianna for making my instructions both compelling and comfortable reading.

PART I

MASTERING YOUR MINDSET BEFORE YOU ABSORB THE SYSTEM BY DAY TRADER JOSH

Note: This section contains 14 generalized lessons based on the premise of my first book, The Truth About Day Trading Stocks. Each lesson includes updates and changes I’ve made since its publication in 2009.

LESSON 1

Control of Emotions and Mastery of Focus

■ The Fear and Greed Factors

Nothing affects your trading behavior like these two disruptive emotions. You need to be aware of their influence whenever you’re 3 in a trade. The fear factor keeps you safe, but you make very little money. The greed factor tempts you with the chance to make a lot of money, but it usually just gets you in trouble. Fear is a natural instinct. From birth, you’re hardwired to avoid risk. But greed has the power to override fear and cause you to do things that you normally wouldn’t. In day trading, fear and greed have to be squarely faced, always watched out for, and tamed. You can never totally apprehend their influence on your subconscious. No one is completely immune to these overwhelming impulses, but you can train yourself to resist them in each of your trading decisions.

■ How to Control Them

The way to keep fear from manipulating your performance is to limit your exposure. This is why I stress that you only trade in 100-share blocks, and sometimes less. With 100-share blocks you won’t feel as much fear as when you’re wrestling with 1,000-share blocks. CONTROL OF EMOTIONS AND MASTERY OF FOCUS 4 ou steqitseta atri h ucs aeo vr day every of rate success ■ focused: stay the to ways in crucial factor are Here quintessential trader. the is Focus ■ ■ ■ ■ ■ ■ ■ ■ otlkl o’etaigmr hn10sae e trade. per shares 100 than more then position, trading dollar a you’re full trading likely one while most fluctuate wreck bad. nervous can a so that you’re stocks If not $1,000. trade minute. down every I $100, that you’re down find Then soon shares? only will 1,000 You You’re holding you’re dollar. if full what But a by you against otaemr hn10sae st eieaeylmtyusl oa to yourself limit way deliberately urge trading. in to intra-day your get is sating shares while quickly of 100 disaster can maximum than a you avoid more to trade and way to in, The head. kicking your start over can greed then te ast vi erinclude: fear avoid to ways Other moves stock the and shares 100 with trade a in you’re Suppose te ast vi re include: greed avoid to ways Other day, all profits small making with unhappy yourself find you If Never certain a trading been day, you’ve all way If consistency. your breaking Avoid Never instead days—taking for break losing a consistently been you’ve when trading Not money rent/mortgage your with trading Not the in closed it because red overnight position intra-day an holding Not day— all position losing a holding Not ras opoecls otist h ahom n oon. so and bathroom, the lunch to no trips means no That cents. calls, 15 phone especially for trade, no trade a breaks, intra-day in while an screens it’s your when off eyes your take Never Trading— While Focused Stay to How ra h odnRules. Golden the break Trade position. a average-down recklessly 300 onot do hrs(he ir)prtaestpweee you’re whenever setup trade per tiers) (three shares l Day All tr rdn ifrnl ntels hour. last the in differently trading start always havinganexitplan elpielevels price real . 5 CONTROL OF EMOTIONS AND MASTERY OF FOCUS . . Once focused focused If there’s a major national crisison occurring, the and stock it’s market, having then an you effect should takeDrink the coffee day to off. staystation. alert, and The exercise exercise andcirculation is stretch is at especially improved. your You’ll effective trade becalm, because and more you energized, your won’t but get blood also fatigued more and have muscle aches. Don’t trade on awill day most likely when cause you you to have trade personal/family onIf emotion. issues you that havetrading. a You don’t hangover, have to then start wait early in until the morning. late afternoon to start Before you engage in anyyour activity screens, that you distracts must you close from your watching positions, hopefully at a profit. After I’ve trained you, if you don’t stray from my system, you’ll be a much betterprocedural and day will keep trader. you on What target and I alert, that teach is, is very structured and you master this system,and you’ll how. know But most when of you’vemistake all, in made you’ll real a know time, and mistake, when how you’re to about head to it make off, a because you’re ■ ■ ■ ■ LESSON 2

How Overconfidence Can Destroy Your Trade

6 ■ Confidence Is Great Until You Have Too Much

Overconfidence, like the greed factor, makes you take too many risks. But it’s not about the itch for more profits. It’s about getting too complacent with your trading style, or trying new trading strategies without testing them first on the demo (paper-trading). Worst of all, it’s about trading this system that you see in a book without being formally trained in it. Here are some typical indicators that you’re trading with overcon- fidence:

■ You place a trade with very little prior research—you just dive in.

■ You stay in a trade past your predetermined exit points. You place a trade seconds before a major report is released, and you try to predict which way the market will respond (you’re trading into an earnings release). 7 HOW OVERCONFIDENCE CAN DESTROY YOUR TRADE . Never stray from them. As soon as you do, Always use the Golden Rules Don’t ever try to make ‘‘double’’ the amountyou’re on much a more trade—not experienced. until Stay highly consistentand when then trading: slowly trade progressprogram. in If from you 100-share jump there. right in blocks, That’s andthan try what to one apply I a stock new teach system and to inYour more more my failure than is 100 shares, practicallyway that’s too guaranteed. thin. overconfidence. You’re spreading yourself Only trade stocks that have passedI the clarify criterion-selection later). test Only (this tradedemo them (paper-traded). once you’ve tested them on your You recklessly average down a trade and hold a losing position. You add more shares toto your hold trade overnight, and and don’t300 have then shares enough in you one capital find single yourself intra-day trade. holding more than you’re trading on confidence andgambling. not trading the system—you’re This will keep your confidence realistic: Think about it. When you day trade, you must keep your levels The telltale sign of overconfidence is inconsistency with profits In the past, some of my own biggest bloopers were seeded by uniform. That may sound boringkeeps and you sometimes safe it from is, reckless but trading. uniformity and/or losses. For instance:$500 and you’ve $1,000 per been day steadily inor profits, losing making and $3,000 then between suddenly per you’re day.of making your This consistency means levels, you’ve and started the reason trading is outside you’re getting cocky. ■ ■ ■ ■ ■ ■ overconfidence. If you’re undermake my my mistakes. wing, You’ll be Irules way and will too procedures busy not and struggling you to allow won’t apply you have all the the to time to get reckless. LESSON 3

Dealing with Your Impatience

■ Traders Have to Cope with Two Kinds

The hardest lessons a trader will learn usually result from impatience. 8 In day trading, you deal with two forms of this weakness. The first kind of impatience you’re going to feel right out the gate, from your first day as a beginner. Most amateurs want to fast-track their way to pro-trader glory. What they don’t understand is that the true road to success is about slowing down and taking the time to learn the deep skills of day trading. Everyone wants to progress quickly in this business. The sad truth is that most beginners lose their start-up capital—at least once. Amateurs quickly get impatient when they can’t keep their profits consistent. Finding the tolerance to deal with slow progress is too hard. It’s not what they expected. Then they get reckless and lose. The realistic way to see day trading is to picture a college student earning his Master’s degree. It certainly takes patience—and years— to achieve a Master’s degree. Why should becoming a pro-trader demand anything less from a person? You feel the second type of impatience when you’re down in the trenches of day trading, and you’re learning to wait for your intra-day signals. Intra-day trading patience is what really counts in pro-trading. 9 DEALING WITH YOUR IMPATIENCE How to Control Your Impatience Don’t trade if you’vebreak had and go a back couple to demo-trading—practice of without bad realDon’t money. days force in trades a because row.price your target Take target doesn’t a price hit, then isn’t you hitting. have If no your trade. It’s that simple. Get a really comfortable chair and trade inMake a sure lit-up your atmosphere. stocks match my criterion list (I clarify this later). Don’t try to make huge profits on oneDon’t single quit trade. your night or weekend job. Don’t expect to trade forwing income of until you’ve a practiced seasoned under veteran.consistent the And profits even then, or don’t income.much expect How to training well make you you receive dolearned. and This depends how is much on like you how anyput apply in, other what and profession. you’ve in You order getskillful. to back make what a you big profit, what you put in must be Impatience, and all the losses that result, causes amateurs to crash ■ ■ ■ ■ ■ ■ Amateur Impatience: ■ ■ and burn and give up. Thegoing good to news is hit that, most withYou price my need system, targets to you’re in be the onEssentially, first high you’re two alert paying for hours yourself only to of 120 be the candlesticks patient market. for on 120 the minutes. charts. You must have the abilitylion to that watches sit its at prey. a trade station with the focus of a Intra-day Trading Impatience: LESSON 4

Knowing When to Stop Trading

■ Why Taking Breaks from Day Trading Is Necessary

10 For any trader, pro or amateur, one of the hardest decisions to make is whether to stop trading for a while. Amateurs usually view this as surrendering, or giving up, but pro-traders understand that it’s a necessary aspect of being a seasoned professional. If you’ve been trading in the red for over three days, and your emotions are dictating your style and performance, then it’s time to take a break. During your hiatus, however, you should remain very active in the . Later on I show you what I call ‘‘sideline trading.’’ You’re going to findthatbreak-takingcanactuallymakeyoumoreprofits.Whileyou’re pausing and sitting on the sidelines, your stock prices can hit key high points that you otherwise wouldn’t have waited for. Thus you can enter at much more desirable and profitable price levels. If the fear and/or greed factors are running you, you will only make bad decisions. When you know this is happening it’s in your best interest to stop for a few days, or even weeks, or even months. Then and only then can you find the right perspective and finally get back to the battlefield with new confidence and new focus. KNOWING WHEN TO STOP TRADING 11 The Truth About Day Trading Stocks . Resolve to stop repeating them. From repeat Lessons 5 through 9 deal with risk management, which is a critical Taking breaks is all about understandingon how those to agonizing capitalize lessons. What to Do During YourBreak(s) Inevitable Lower your expectations. Remember that each timeyou’ve paid you a lose high moneya price mistake in for you will the a not very make stock again. expensive market and painful lesson, Don’t return to active trading with thethat goal you of lost retrieving in the your money previousonly battle. bring That on attitude and more strategy disasters. will Reevaluate your financial situation. Createallow a you to new return budget to that activeleft trading will with. without Lick the your bad wounds emotions and you move on. Don’t just jump back into activeto day demo trading. First, trade take (paper-trade). a Get fullenvironment week before your going rhythm live back again. in a risk-free Continue to watch your current stocksever on lose an track intra-day of basis. their Don’t performancestopped and trading rhythms. doesn’t Just mean because Wall Street you did.return That to way, trading, when you you will still be in the loop. Go back and reviewwith every the largest single losses tradeFind and you’ve your the ever core biggest made. issues profits.mistakes Start and Look that you deal for with patterns. them. Usually the issues are Note: factor that is grossly under-taught in most training programs. ■ ■ ■ ■ ■ ■ ■ ■ LESSON 5

Risk Management: Buying Power versus Capital

12 ■ How Much Buying Power to Trade With

Capital is the amount of cash that you initially fund your account with. Buying power is how much leverage you’re given by your broker. For instance, if you’re given a 4:1 leverage, then your initial 25K capital investment gets you 100K in buying power. Your buying power determines how many shares you can purchase of any given stock. You should only be trading with money you don’t need for bills. The start-up capital you initially use to open your account should be investment money, not cash you need back right away. This is obvious, and it’s not my emphasis here. Here I’m discussing how much buying power you should be trading with. Much depends on whether you’re intra-day trading or swing trading. But either way, in order to actively day trade with a 4:1 leverage or more, you must have at least 25K in your account at all times, because this is enforced by the Securities and Exchange Commission (SEC). Do the math and it’s plain to see that when you’re intra-day trading you’ll have at least $100,000 in buying power when you open an RISK MANAGEMENT: BUYING POWER VERSUS CAPITAL 13 100-share do not hold trading, you can trade with swing . recklessly . If you’re trading a $100 stock, then you only need On the other hand, when you’re Risk management can be kept in check by consistently trading in Do you see where that can lead? Do you really want to be in a For instance, you start a trade with 100 shares of a $100 stock Risk management really boils down to how you can control your Once you get better at this, you’ll start trading multiple positions. Of course not; as a beginner you should only be trading in I coach both 25K account holders and the highly capitalized people 100-share blocks. Self-discipline is obviously the key there. 1,000-share position while the stock isgambling. dropping precipitously? That’s (using up only $10,000 ofquickly your start $100,000 in purchasing buying more power), andeasily but more end you of up the holding samebuying 1,000 power stock. shares allows You you of can to this do so. $100 stock because your consumption of theit’s buying very easy power to slip inmeans up averaging and your down start account. recklessly trading Believe a position, me, which For instance, you’ll eventually have anAt any average given of time five you stocks may be perwill holding day. five be separate 100-share positions, and blocks. each $50,000 Therefore, in buying you’ll power only to be need, trading on those five average, positions. blocks per trade $10,000 of your $100,000 in buyingneed power. $10,000 This to is purchase because a you 100-share only block to trade. account with the minimum 25K. Does this meanall you of should that be trading buying power? as much capital as youis have the in limit. your account. Obviously Inthis you new other have system, words, to and the when limit sky Ido. yourself mentor One while you, I’ll first of be trading my making sure major that rules you in swing trading is that you who are well into the seventhat digits. I just always tell because theshould seven-digit they start people trading have with that millions much right out of of the dollars gates. Those doesn’t highly mean they margin overnight. You cancash only capital. hold That as rule alone many keeps shares you as very safe. you have in 14 RISK MANAGEMENT: BUYING POWER VERSUS CAPITAL ■ ■ ■ ■ ■ hypoeta hyr rdn ysse rprywl e them let I will properly system stakes. my the when upping Only trading start have. they’re they that capital much prove how they matter no position, each going on losing. or from homes frustrated get their do rules they losing more but not street, break the and They’re on risks starving can. more they take moderately because they the of that simply most is than guess it My get to funded. slower often are traders funded oIalvaeti yhvn vroepatc n10saeblocks 100-share in practice everyone having by this alleviate I So tr ih10sae e nr.Bte ob aeta sorry. than shares. safe be 5,000 to with Better it entry. trading per of shares be 100 shares should with 5,000 you Start afford mean can doesn’t you stock because a just trading, swing When has that holding position yourself single find a ever Don’t position. a averaging-down Avoid in them trade Only well. very blocks. know 100-share you that stocks five with Stick given power. be buying you’ll 25K, in with leverage account 4:1 trading day your fund you Once hntesoki vr$100. over is stock the when o oe u o o o o’ edi;i ilol e o in you get only will it it; need don’t you now trouble. ask for can but you with Eventually trade more, to investment). for you 50K capital have initial that you’ll your suggest so double I 2:1, (or only want. with you account your power start buying of amount whatever easo aaigYu uigPower Buying Your Managing on Recaps oeta 0 shares 300 than more Donotuseallofit htsepcal true especially That’s . o a s for ask can You . LESSON 6

Avoiding Overexposure to Market Risk

■ Normal Exposure Is the Amount You Can 15 Lose—Overexposure Is Disaster

Normal exposure to the market usually refers to the amount you can afford to lose in a single trade. Overexposure occurs when you’re not prepared for that loss. Here are some causes of overexposure:

■ You’ve purchased too many shares at one time without being used to the swings and the rhythm of the stock.

■ You’ve purchased a stock at the wrong time of day, as in the first 15 minutes, pre-market, or aftermarket, when uncertainty is dangerously high.

■ You’re trading stocks that don’t meet my stock-selection criteria. 16 AVOIDING OVEREXPOSURE TO MARKET RISK ■ ■ ■ ■ from safe keep to need You quick. rich losses. get need big to you trying amateur risk. trade, an about as market forget per but profit, to to blocks your limiting overexposure 100-share also in you’re of course trading Of possibility learn By any to profit. way eliminating a fastest you’re at the trade is to blocks how 100-share in consistently Trading ■ olrprtae ogtsatdyune ohv pay-per-share a trading by have trade. yourself to per of blocks ahead need get larger-share you never to started self-discipline get the and To the broker trade. in per would dollar you a as trade per $9.99 paying about pay-per-trade don’t pay-per-share you worry and use trades, to you block have 100-share When intra-day several later). place this can you elaborate (I structure this Most structure. commission h e otaigi 0-hr lcsi aiga having is blocks 100-share in trading to key The hnyupyprsaeyucnepc opyaot4 et to cents 40 about pay to expect can you share per pay you When a-e-hr rkrmyntb eesr.Iepanti nthe in this explain I necessary. section.) be swing not may broker pay-per-share to a ready you’re market (If to overexposure risks. avoid and blocks small-share in trade to you alSre nw h esbte hnyuadId,s o should you so do, charts. levels. I the and price trade you our just than into better you’re built news the already system knows is my to Street news Wall learn try the you that Don’t As realize reports. do. to economic going will Street and Wall news what on predict trade to per try blocks Never three-tiers/different from 100-share shares 300 in levels. of price trade maximum a only with trade, trading, intra-day When pay-per- a with account an Open rvnsOverexposure Prevents Blocks 100-Share in Consistently Trading easo o oAodOverexposure Avoid to How on Recaps omsinstructure. commission ietmre access market direct only wn rd,hwvr hnhaving then however, trade, swing share nieboe.Ti allows This broker. online DA rvdr offer providers (DMA) pay-per-share AVOIDING OVEREXPOSURE TO MARKET RISK 17 circumstances. any a position overnight if it’s never hold an intra-day position overnight under on margin. (In my programmastered the I system.) allow this only when you’ve totally If you’re new to swing trading, Avoid trading in pre-marketan and amateur aftermarket trader. hours, especially as Never hold Never trade stocksprocess. that don’t pass my stock selection filtering ■ ■ ■ ■ LESSON 7

Budgeting Your Way to Profitability

t’s worth repeating: the most common mistake most amateur day Itraders make is thinking they’re going to advance quickly in day trading. Most amateurs lose most of their start-up capital within 18 months of their first trade. You can avoid this by receiving proper training. My mentorship program helps you set realistic financial goals. I also help you keep your destructive impatience in check. I keep after that like a smoke alarm. My goal in this lesson is to financially prepare you for the rough road ahead.

■ How to Stay Out of the Poorhouse

■ Obviously it’s essential to not quit your main source of income. Most of us mortals have to work for our hard-earned cash. If you happen to have plenty of savings, and you’ve deemed it investment (or disposable) income, then I guess you can ignore this advice. But to those of you watching your wallets, I can’t say this enough: I hope you’re aware of the danger of investing in a career that can wipe you out overnight. BUDGETING YOUR WAY TO PROFITABILITY 19 EST. A.M. . and be done by –11:30 A.M A.M. . PST. A.M My job as your mentor is to train you on how to not lose all your 8:30 It’s ideal if youthe can West work Coast, nights you and can weekends, start or, trading at if 6:30 you live on You need 25K tosuggest a open cushion a of pay-per-shareif an you account, additional fall and 5K. below I‘‘equity This the call.’’ is This strongly minimum means important 25K, you because mostyour then leverage/buying likely you’ll power, will and be you have will limitations placed needfunds to on in immediately to add your an account tothe get it additional back 5K up helps to youstarting at out. have least peace 25K. of Therefore, mind when you’re first In the beginning do not expect totrading. make It consistent will income take from day youa several pro-trader months who (or can even rely years) onincome. day to trading become profits for your consistent It’s best for you toduring have market a trading job hours, that which doesn’t are require 8 your attention money. After you’ve learned thatyou essential, to work only on then consistent will profits. I allow The bottom line is that you mustn’t be financially desperate when you’re day trading stocks.life’s savings Your or credit, starting or your capital kids’ college shouldyour fund. You start-up not should approach capital be as your youning, would researching, any business budgeting, investment: andBecause by with even plan- under plenty my of wing,can and margin even still for after slip months error. of uphard-earned training, and dollars. you make a classic mistake that will cost you your ■ ■ ■ LESSON 8

A Realistic Look at Stop-Loss

■ Stop-Loss Should Be Automatic

No day trader likes to place a stop-loss. But all pro-traders understand 20 that it’s a normal part of the day trading process. As I mentioned in the section on updates and changes, my current system redefines stop-loss and how or when you should execute one. (For those who have been under my mentorship, I want to remind you again that I no longer use nominal value stop-loss exits. Now that I use swing trades as major pivot points, it makes absolutely no sense to stop-loss when I’m $XXX in the red. Instead I capture even stronger levels when accumulating a position. This I clarify later.) Here I’ll show some important uses of stop-loss in some very definable situations. There is never any guesswork with my system. I refer to this as strategy stop-loss.

■ How to Properly Strategize Stop-Loss without Hesitation

■ Always have a predetermined exit strategy. Never hold an intra-day position past 4:00 P.M. at market close. Never hold overnight. A REALISTIC LOOK AT STOP-LOSS 21 . in either + .ontheday pivot trading P.M have to know your always any position into an earnings release (typically in after- hold overnight—just never into earnings release. It’s way can of earnings release. This isyou especially true for swing positions that Never allow standard stock related newsprocess, to dictate except your when entry/exit yournews’’ stock wire is on the literally MSNBC hitting channel. Combinedsuch the with as ‘‘breaking other the factors, volumetiers on you’re the in, stock only and thenin should how you the many think red. shares about If and just you’reclassic exiting which time when in to the stop-loss. green, that’s great, but if not, that’s a This strategy allows you thelost opportunity today on to the recapture very the next amount market opening.) Never hold market trading). Exit your entire position by 4:00 If you accumulate more ofmargin/leverage, a swing then position intra-day you and muston are using stop-loss margin. the (Later amount I of introduce shares to you what I call too risky to holdtrading, into the a stocks release, we because trade once can Wall easily Street fluctuate starts $30 direction. That’s a $3,000 loss, evencall with wrong. 100 shares, if you get the All this may sound easy, but believe me it is not. I only got back Other examples of strategy stop-loss would be a CEO giving notice A great example of this is what happened with TSLA, a stock of The above almost never happens with my stocks. Most news is in because it wasregardless, which hitting illustrates the my point: lower you levels that I was planning for, of stepping down or when mergers are announced. Again, these things mine in 2014. A battery caughtthat fire news in broke, one I of immediately Tesla’sdays exited new later my cars. positions When I on simply TSLA.levels A and recaptured riding few my the price loss back by up. getting back in at lower price levels. already factored into thethe price, moment so and devastating breaking or news otherwisestray hugely from has impacting my to for plan. me be to truly in ■ ■ ■ 22 A REALISTIC LOOK AT STOP-LOSS eesa n ie ieo h a—oguesswork. day—no the of time given back any reverse levels—at to likely more much that green. is the price into current the red, the 2 5 ree 1 nterd twud’ aemd n sense. any made losers have been have wouldn’t would trades It profitable date. past red. to my of the many in then had, $10 I been If even I’ve when or stop-lossed $5, haven’t I $2, why to as understanding clearer stop-loss then level, price follow: to easiest system. my with uncommon very is $100 news the our with happen never almost hsi h rtclrao h o’egtt know to got you’ve why reason critical the is This ysse is system My much a have you’ll system, my of framework the learn you the After actually is stop-loss strategy for reason prevalent most The onetedtrading countertrend fyuko o aeamsaeb neiga h wrong the at entering by mistake a made you know you if tsta simple. that It’s . hsmasta fImdel in deeply I’m if that means This . + tcs oso-oscue by caused stop-loss so stocks, all fyu price your of LESSON 9

Day Trading Is Not Gambling

■ There’s a Huge Difference Between Them

In The Truth About Day Trading Stocks, I dedicate an entire chapter to the differences between gambling and day trading stocks. Here I recap 23 how they’re not the same, and also how they can become the same if you’re throwing the rules out the window. If you were to ask a pro-day trader whether he thought day trading was gambling, he would most likely respond with this question: ‘‘Are you referring to when I was an amateur, or to me as the veteran I am now?’’ Without any proper training, amateurs are likely to gamble. Gambling boils down to the simple odds of winning or losing, nothing more. Gambling doesn’t offer many options while your money’s in play. Once you roll the dice in craps, and your bets are on the table, you can only sit back and fervently hope that your numbers land in your favor. You’re casting your fate to pure luck. On the other hand, when day trading stocks, you have many strategic options. If you skillfully utilize those options, your day trading will never be gambling. 24 DAY TRADING IS NOT GAMBLING ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ahtrade. each o’ r otaeo esado cnmcrprs nother next. in do reports; will Street economic Wall what and/or predict news to try on don’t words, trade to try Don’t and blocks, 100-share in trade Only rings. bell the homework your Do prices limit and stop-loss your predetermine Always all it’s Again, levels. success. price trading your day knowing your about in stock factors and analysis key Chart are charts. to research quote ability 2 the Level and have charts You stock transparency. view of the there’s retraces. Finally, it until position your into tier can You retraces favor. price your stock in your until position your day. can (intraday) the hold you in can You later Then levels trade. desirable a more of at middle losses your the recapture in while can decisions You these price. limit alter and stop-loss profit your much predetermining how by and want tolerate you can you the loss much how on decide can wait You to simply add can to is levels you (this position price Or your favorable decreases trade. lower/higher/more or the for increases in price sidelines stock still the you’re as funds while more add can You ee tr rdn e tc nlresaebok,lk 0 shares 200 like blocks, more share large or in stock new a trading start Never trades. swing nCasinos in a rdr’Options Traders’ Day o oMk ueYur a Trading, Gambling Day Not You’re Sure Make to How tc o10sae e rd nalnwstocks new all on trade per shares 100 to Stick . tc oyu rgnlplan original your to Stick aesr orpielvl r orc before correct are levels price your sure Make . not vrgn down). averaging . Not ee odmri overnight margin hold never Available . before entering on DAY TRADING IS NOT GAMBLING 25 try to do not The Truth About Day Trading Stocks From Lessons 10 through 14 address general trading strategies. Luck is a gambler’sday best trader’s friend. distinction. Not needing luck is the go big and get yourfrom money trading back. and Instead, regroup. take Also ain avoid couple your day of life trading days is when off causing something bad emotional swings. Don’t ever trade because you ‘‘feel lucky.’’ If you’ve been trading in the red for a few days straight, Note: ■ ■ LESSON 10

Consistency Rules!

■ Stay Consistent in Your Trading Habits and Tactics

In intra-day and swing trading, consistency equals success. You can be consistent in losses, or you can be consistent in profits. The latter 26 is a feat, the hardest thing to achieve, and it takes lots of hands-on practice. This is why I’ve evolved my training program to last for one full year. Considerable time is needed to master this intricate system. Unfortunately, the hard way is the only way that works. You will learn from your own mistakes. My job is to help you minimize those errors, and to offer advice and strategies that will help you start profiting, sooner. ‘‘How do I trade consistently?’’ you might ask. ‘‘I just sit at my trading desk all day, doing the same thing over and over, right?’’ Actually, that’s true. But it’s not so easy to master. Here’s how to not break your consistency.

■ Maintain a Highly Regimented Trading System

■ Trade the same stocks every day. Get to know your stocks the way you know your favorite songs—you know their rhythms and lyrics by heart. The longer you trade familiar stocks, the quicker you’ll consistently profit. CONSISTENCY RULES! 27 share + start trading in 500 do not on a day when your head isn’t screwed + consistent on each trade. If you’re trading consistent on each trade. For instance, if you’re share sizes profits Finally, keep your brainclear in mind for check. several If weeksday you’ve straight, when then been you’re don’t trading struggling try with withissues. to a Don’t trade a cold on trade or a if dealing you’reday with not or emotional clear-minded. two off. It’s It’s okayyourself better to down to take be $2,500 a safely onon the straight. sidelines than to find Keep your 100-share blocks all dayblocks long, in the final hourThis of break trading or in at yourpsychology. any intra-day When other consistency time you of will begin theyourself, to affect your day. trade emotions your will erratically trading quickly and get out overexpose of control. comfortable with making $15then per don’t jump trade to whenfor swing intra-day this trading trading, is until that you’re infor ready. swing profit. trading The This you reason sounds wait great,a for but $2 a if run, much you’re you will larger not mostprofits used $2 likely short to run break because waiting your of for consistency extreme and intra-day sell volatility. your Keep your Hands down, consistency either makes or breaks a trade. This is true for all tradingapplications systems. of My this tool. system It requiresmust has be exceptionally hundreds followed of high to rules the max. andquickly Any procedures turn break a that in great consistency trade can into easily your and worst nightmare. ■ ■ ■ LESSON 11

News versus Noise

■ Learn to Resist Media Babble

As a day trader you only need to worry about news if it’s going to directly affect the stock(s) you’re intra-day trading. Other than that, don’t allow the media to influence your stock picking and trading 28 activity. My number-one rule regarding news is very simple: if your stock is trading abnormally because of recent news releases, then stop trading it on that day. Sit on the sidelines and wait until the craziness settles. For the most part, news and economic reports will immediately affect trading activity on Wall Street. Your job as an independent day trader is to not be in a trade when the news that just hit the wire is making that stock go nuts. Your job is to be fully aware of when the news hits the wire. But keep in mind, later on I will be showing you the strong swing levels; those levels typically will get broken on days of big news. I am a pro-trader so I know which levels to trade and which not to trade. This is the hardest part of my system to train you on. But for now safety is key. If you’re not sure, then simply don’t trade that day. Better to be safe than sorry. NEWS VERSUS NOISE 29 have these dates want to be trading must do not . You dollars in 60 seconds after earnings is + quarterly earnings Bankruptcy announcements Core product issues Merger talks Class action lawsuits Fed cuts/hikes How to Monitor News andReports Economic on the daymost of certainly an have earnings abnormalstocks release. volatility. and On Simply wait that trade till your thethe day next other your market day stock has to beginpredict will responded how trading to Wall that Street the stock, will after respondLNKD earnings to can the report. numbers. fluctuate Don’t A 30 stockreleased, try like breaking to all intra-dayany support/resistance retracement. You levels don’t without want toor be drop. part of that parabolic climb on a calendar—this is paramount. You There are several otherduring intra-day news trading, releases including: that can affect your stock How to findFinance. this Click data ‘‘News,’’ then istype click simple in the your and ‘‘U.S stock Earnings’’ free. symbols.stock tab, will This Simply be and will releasing go give its quarterly you tocalendar earnings the and statements. Yahoo next Mark plan your around date that your date. Keep in mindleading that up to earnings the original release date.than Typically bumped dates they’re up. pushed Keep change out rechecking. rather several times The most important pressreports, release particularly on all stocks is the economic ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 30 NEWS VERSUS NOISE eywl,adko hc esi nynieadwihnw can news which and prices. stock noise day’s only stock current your is the know affect news must will which and you know is point and The well, it. very about do to what decided ■ ■ olntwn otaeta tc gi until again stock that you trade And to up. is want situation freezing wouldn’t that nothing, in doing be to a trader, want at deer-in-the-headlights you’d either a thing immediately, last The exit stop-loss. to a want or a would profit be You not TSLA. would This for they year. day that next great reports cars CEO all-electric GM producing the start say to plan Let’s time. real in announced gets it. MSNBC discussing the be and not normal be will will talking-heads trades morning’s that on volume your eesageteapeo esthat news of example then great stock, a Here’s your to important that isn’t news the if general, In ■ ■ ■ ■ o hudawy u uc essac nec fyu stocks, your of each trading. on before search morning news every quick a run always should You of side right-hand bottom screen. CNBC the CNBC on the the clock keeping countdown watch a Especially by there’s trade. you found when while day be all on can Channel News above Business examples news The he opttradvancements competitor Chief interventions Governmental resignations CEO threats strike Employee will fetyu tc hnit when stock your affect alSre,nttenews the not Street, Wall , LESSON 12

When It Comes to Averaging Down, Amateurs Beware!

■ It’s Not Based on Real Price Levels 31

Here’s a quick explanation of the difference between tier-trading and averaging down: the latter means you’re adding to your position every time the price drops or rises in exact amounts, like 50 cents or $2. There’s no emphasis as to real price levels. You’re averaging into a position at nominal values that are not formed on any chart. On the other hand, tier-trading is based on knowing that your first entry is one of several supports/resistances, and if the price runs against you and you choose to add to your position, the next entry will be based on a real level that has been formed on the chart. In later sections I revisit the tier-trading aspect of my system. There’s nothing scarier than being an amateur trader holding a 1,000+ share trade of a $100+ stock and your price is dropping precipitously. The reason why you’re trading over 1,000 shares is most likely because of a reckless averaging-down strategy. You may have wisely begun your position with 100 shares off a real level (or not), but you quickly started adding more shares as the stock price moved 32 WHEN IT COMES TO AVERAGING DOWN, AMATEURS BEWARE! vr rd eetr.Iko do. I know I enters. he trade every ■ ■ ■ ■ ■ ■ ■ ed ohv titpa feeuinadh uthv it have must he and execution of plan strict a have to needs as do, I what and see. down will position. averaging you a ‘‘tier-trading’’ between call difference I huge what a of There’s examples with this, at by mean not I and it? shares, do more traders advanced do why So, trading. certainly of It way myself. on this amateur of still Manhattan an plenty when is did in Back I Street, this. trading Wall do by was schooled pro-traders getting I saw I When floors, nightmare. trading professional this into get still this broke—and for going basically mentality. is gambling the He is power. buying of averaging-down out runs your plan, real no gambling. reckless had become has you’ve strategy Since you. against o a naaeraodti els cnro o treshe starters For scenario? hellish this avoid amateur an can How accumulate to simply levels price at reentering they’re Because can you but amateur, an longer no yourself consider may You he until down averaging continue will amateur an cases, most In ett irit;ayhn lei ekesaeaigdown. are averaging levels reckless is price else what anything clear to into; a as tier Having decisions to overnight. best wiser hold make to plan you you helps and budget especially trade trade, swing every a into it’s going if budget a have always should You of swings— portion on margin overnight margin the hold out not and close Do to swing. close. a prepared at in be position and your then margin so, using do you’re you if position If your to emotion. add on not trading Do you’re if position your levels. price to your add on not clear Do not you’re if position your to add not Do times, them all know at and levels support/resistance lower/higher your all Know eev omltann ota o nweatywa eesto levels what exactly guesswork. is know way you other Any that trade. so training formal Receive vrgn Down Averaging Recklessly Avoid to How ee hold never nitadypsto overnight. position intra-day an prior oetrn orpsto ntefis place. first the in position your entering to real rc ees ae hwyuwhat you show I Later levels. price prior to LESSON 13

What Stocks to Trade and Why

■ I’ve Already Selected Them for You

Selecting stocks to day trade is one of the easiest tasks you’ll encounter while trading my system. The act of actually trading them for consistent 33 profits is the real challenge! I’ve devised a stock-selection criterion system for you. This system greatly reduces a lot of guesswork in choosing the right stock to trade, and when you trade these stocks you’ll have a better chance at profiting consistently. You may already have a few stocks that you’re accustomed to trading. You may have been successful at trading them in the past, but they must pass my selection process. If they don’t pass, then you will have let them go. If you’re emotionally attached to your stock(s), it will inevitably hurt you in the long run. If you have been trading a loser simply because you are trying to recapture your previous losses, then just let it go—move on. Before we get into the actual criterion list, I want to make these two points: First, this system does not foretell whether the stock is going to gain or lose value in the near future. It focuses more on the consistency of the stock price’s intra-day and swing fluctuations. This means that your stock should be highly predictable on how it trades. We are day 34 WHAT STOCKS TO TRADE AND WHY tahdt orsoks.I h tc os’ astecriterion- the pass opportunities. doesn’t trading intra-day stock greater the then If process, stock(s). selection your to attached ■ pass not factor. doesn’t criterion stock stock-selection mandatory your each If of list a is Following ■ h oeyutaeyu tc,temr hswl eoeautomatic become will this more you. trades. the for stock, pre-market your how with trade and you familiar patterns, more highly The chart become levels, and price day, news, every their stock each research system your my and the with of work when not worthy simply instance, be will it For not $100 tomorrow. and list factors criterion watch primary stock the of one lose it how know to need simply today. We trading month. be next will or will week stock the next what doing on be focus don’t we therefore ; not traders, h etavc a ieyuhr sto is here you give can I advice best The quickly can it but today, trade to great be may stock your Second, o ao al gi,w r o netr,w r a traders. day are we investors, not are we up Again, yourself fall. setting you’re major then a of, for wind that something caught know hasn’t you Street think you Wall simply If stock trading. worth low-volume-traded not stock A it’s a means company)? trading the volume be in (low to with interest do want low to nothing really wants you obviously Street do Wall way: that this slowly. very it trade manipu- about usually easily they Think be and can (MMs), day makers market per by shares lated million 1 under trading stock is Any that volume. is trading intra-day first sufficient have The must process. stock Your stock-selection my in factor primary months) 12 daily. traded past shares the million 1 over least at (calculated be must volume daily average The d tt orsokwthlist. watch stock your to it add System Criterion Stock-Selection My Learn hr r eea esn h h al vrg ouei the is volume average daily the why reasons several are There e tgo it let one fteelse rtra hnyumust you then criteria, listed these of oeo obte tcsta offer that stocks better to on Move . hrfr,yums monitor must you Therefore, . never eoeemotionally become rc rp below drops price liquidity = . WHAT STOCKS TO TRADE AND WHY 35 . stocks become + time of day . Some $100 $250?’’ Quite simply, because they are more than a penny gap over differences between the bid and ask prices In Figure L13.1 there is a sample chart that would be sufficient For now all you need to know is that the stocksAlso in consider this that price most stocks priced over $100 will already Later you will realize that these stocks happen to be the most In a nutshell, stocks in the price range are the best to‘‘Why trade not when priced Second, the The average intraday(as evidenced price by chart swings analysis). must be sufficientto to trade. You trade wantintra-day. a chart Your pattern stock that should is be consistently fluctuating moving at least 15 cents every too expensive at that pointThey and also take start up to toostock-split much soon, have so of huge there’s your no bid/ask capital. sense gaps, in trading and them they anymore. will mostly The stock price must be between $100 and $250. range are the mosthave highly the largest traded volatility. stocks We on love volatility! Wall Street, butexemplify also virtually all the fundamental criteria thatcompany. make They up will a great have consistentand volumes, most consistent importantly, liquidity, are consistently traded by Wall Street. traded by black-box (high-frequencymally trading isn’t systems). good for Thisthe investors nor- algorithms but built into is the great softwarefor that for seeing runs my the it are patterns, system relatively the because easy pricelater levels. as I to show how you I the find framework and trade those price levels. using my system, which is a countertrend trading methodology. We aren’t trading ontrading on news the or intra-day futureorder to price earnings make swings. several growth. roundtrip You We trades need per are day. high volume in will have largerIf bid/ask the spreads, bid depending price isThis on single $135.25, factor the then will make the more ask sense once price you should begin trading be live. $135.26. more narrow when the volumeLow-volume stocks is usually above have 1 huge gaps millionprices. between shares the You per bid don’t and day. want ask ■ ■ 36 WHAT STOCKS TO TRADE AND WHY ■ L13.1 FIGURE h n nFgr L13.1. complement Figure that in patterns one chart the for look simply few now, For a patterns. $220. over and range $215 price between range the trading chart tight a the in In remains minutes. days 5 to seconds 10 ipyaodteesok n n te tcsta n themselves find that stocks other any and news. stocks this to these respond avoid will Simply Street Wall how predict to try ever Don’t products produce detection. that terrorist border involving companies future the several cutting affecting Department budget Defense control the or drug, approving new or approval a (good declining wire FDA the the be hits it news whether news), the bad when or day single move one to in tend percent stocks 50 over defense military low and them. biotech and trading traditionally currently regulations But, be has government shouldn’t you frequent Therefore, to rates. and of interest due stocks trading great biotech recent been are Obviously, not trade to stocks. risky defense very military are usually that stocks approvals— and/or ulations regulations. hr utb osok fetdby affected stocks no be must There vrtm o ilbgnt e n nesadteeielchart ideal these understand and see to begin will you time Over o ee att elwt hskn fvltlt n uncertainty. and volatility of kind this with deal to want never You reg- government by affected regularly is stock/company the If ieMnt hr vrTreDays Three Over Chart Five-Minute ra xmlsof examples Great it. trade not do frequent government WHAT STOCKS TO TRADE AND WHY 37 not be trading it anyway), but some are still in the not This final criterion is very obvious, but you’d be surprised how The problem with companies facing the possibility of bankruptcy Similar to the previous criterion, this factor involves outside Stocks that are constantly affected by the news tend to be highly If you notice that your stock is trading directly on breaking news, There must be no chance, infile the for near bankruptcy. future, that the company will many amateurs trythe to stock trade price a is(so less stock you than facing should $100 bankruptcy. on companies Usually facing bankruptcy process of falling from high price levels. is that the news comes outknow when you the least real expect it. details Andyou of you don’t never the want to bankruptcy be trading until aover it’s stock 50 that too percent has of late. the possibility its Again, of value losing in one single day. There must be nostock. current news headlines that directly affect the influences. If your stock is constantlymajor in economic the issue news taking headlines place, due then to don’t a trade it. Wait it out. volatile, and they tend to have veryYou’re unpredictable charting supposed patterns. to be avoidingsidetracked the and stumped noise. by You the news can that’sstock very currently intra-day. affecting easily your get then sit onaffected the by sidelines the news and until the wait. dust settles. Trade your other stocks in the national-economic spotlight of uncertainty.of There stocks are out plenty there that are not facing a complete meltdown. If you’re in my training program, you’ll be able to watch the 8 to 10 stocks that I trade consistentlymy every levels day. Watching in my stocks reallearning and process. time Once every you master day myown system, is stocks you and the can become then best more add independent. your way to speed up your ■ ■ LESSON 14

Picking the Right Online Broker

■ Pay-per-Share versus Pay-per-Trade Brokers 38 There are pay-per-trade brokers and there are pay-per-share brokers. The main difference boils down to how much is your expense, or the commission you pay, per trade. If you’re a pro day trader, meaning you execute several roundtrip trades each day, then you need to have a low commission structure. I define low as paying between 40 cents and $1.00 per trade when trading in 100-share blocks. Experience has shown me that most amateur day traders don’t use pay-per-share brokers and they don’t trade consistently in 100-share blocks. Much of the reason is that the traditional online brokerage industry, which is all about pay-per-trade brokers, maneuvers to retain amateur loyalty. Here’s a big secret that the pay-per-trade brokers don’t want beginners to learn of. There are online brokers who charge as little as $.004 cents per share (pay-per-share). That amounts to about 40 cents per trade when trading in 100-share blocks. To the amateur who trades through a pay-per-trade broker and pays $5 to $10 per trade, PICKING THE RIGHT ONLINE BROKER 39 racket I’ve mentioned that the pay-per-trade brokers maneuver to keep If you’re turned off by this financial requirement, then most likely There is one condition that I suppose you could call a catch, but it’s First, when you trade through a pay-per-share broker, there’s ‘‘What’s the catch?’’ amateurs ask me. ‘‘How come I never heard amateurs with them.with One popular of training outfits theThese that day ways trading sign seminars and they up training programs usually huge do don’tabout tell groups you pay-per-share this of firms, is beginners. because they bybrokers. contract They pairing with sign pay-per-trade youduring up the and training program. train This you enablesto such profit on off pay-per-trade their your brokers trading trading activity. When platforms I ponder that, the word you’re not financially readythese facts: for if professional you daymake want trading. several to Consider intra-day day trades tradewallet by without for those a getting whopping living, pay-per-trade constantlyat commissions. then east hit And 25K you you in to need need make the any to real money. really a form of promotion: when youwhich begin naturally to advance involves as pay-per-share, a you’ll day trader, findmore yourself and becoming more regulatedneed by a the minimum SEC. of 25K Asbelow and that I the when mentioned balance intra-day before, of tradingamount, you your you stocks. account get If cannot hit it with fall doestrade an on drop ‘‘equity margin call.’’ below until That you that means deposit that enoughup you funds to to can’t 25K. return your balance comes to mind. no scam or catchIf at you all. plan on It’s evolvingplan all to about to a becoming make ‘‘pattern day morepay-per-share several trader,’’ broker. professional. which intra-day means roundtrip you trades, then you need a of pay-per-share online‘‘Why only brokers?’’ purchase 100 And shares per then trade?’’questions. Those are The they understandable answers may want be to surprising. know: no matter how manyshocker—and shares good news. are The purchased, fewmisprint. to cents you hear read about about above that is is no a 40 PICKING THE RIGHT ONLINE BROKER ■ ■ ■ ■ o einr eyfwaaer a tycnitnl profitable consistently stay can 1,000 amateurs in trading few day when Very beginner. a especially only manageable, you for psychologically If more red That’s the day? that $200. in a measly potentially handle a times only by you’re you several then that Can however, handle shares, $2,000. you 100 purchase Can red scare? the a in of kind you’re then intra-day, $2 overexpose to going not uncertainty. you’re market environment. you to blocks, low-risk yourself and cautiously 100-share a amateur in in trading an trade day When You’re to how sorry. learn than to need safe a better you’re keep simple: to prefer they traders, me. day like serious people profile. low only experienced from seek them they about Because hear only You cials. le resaebten10ad50sae tatm a illustrated L14.1). (as Figure time in a chart at quote 2 shares Level 500 the and in most 100 that between note are You’ll and placed. orders chart being filled quote orders 2 streaming Level the all any see at you’ll Look faster. much selling) and (buying than their more position. single place accumulating a to never on cheaper shares typically 500 and blocks, safer 100-share it that in find In trades pro-traders most trades. why swing is blocks. and share This large intra-day purchase to both need don’t you do scenario, multiple-trade They more). or trades otpotaes praht a rdn novstefollowing: the involves trading day to pros? approach the pro-traders’ like Most trading start amateurs can how So drops it and stock a of shares 1,000 trading you’re If it. about Think is answer The trade? per shares 100 just Why question: Next commer- primetime in advertise don’t firms pay-per-share Also, nte datg o10saebok sta resgtfilled get orders that is blocks 100-share to advantage Another roundtrip 25 (that’s day per trades 50 least at place pro-traders Most xtn oigtae ucl a rdtrie rc level), costs price commission Minimizing predetermined a (at emotion quickly without trades losing trade swing Exiting and intra-day each on profits small relatively Taking trades swing and trades intra-day many Making + hr blocks. share PICKING THE RIGHT ONLINE BROKER 41 add small profits direct access trading price immediately. ask Streaming Level 2 Quote Chart from Lightspeed Trading There are several other features and benefits that pay-per-share Taking small profits and small manageable losses is the key to platforms. Direct access meansgoing that through when a middleman you broker. place Youthe are a purchasing market. trade, directly from it’s You not can purchase at the real trading firms offer. Other than low commissionbenefit structures, to the trading largest through pay-per-share brokers is remaining consistent all day. Wein pros the look for stock quickmission price 15-cent structure moves on is critical. intra-day Since100-share trades, blocks, most we of so chance to the profit the $15 timedon’t on pay-per-share we’re each stay trade. trading com- in We in normally aously trade over trading 15 at minutes, leastup and considerably. three usually we’re other simultane- stocks. So those Platform FIGURE L14.1 Also, direct access trading platforms offercapabilities. FASTKEY This order means you execution can use yourorders. keyboard You buttons will to soon execute find out how awesome that is. 42 PICKING THE RIGHT ONLINE BROKER o aet?Adteeaeohrfcost osdr uha the as during such trading how than offer pre-market. consider, learn don’t brokers soon fees to Many will is. in You data factors prices. pre-market more important bid/ask other current pay are your of why there access But direct And per profits. to? $9.99 decent have pay net you and broker still pay-per-trade and current trade you keep can You my real-time during meaning platform feeds, data trading 2 trading. demo Level demo access a direct has using that be program will You structure. ‘hti nywn osigtaefr$.0t 20 profits?’’ $2.00 to $1.50 for trade swing to want only I if ‘‘What commission and platform trading pay-per-share a use always I PART II

DAY TRADER JOSH’S INTRA-DAY TRADING METHODOLOGY

Note: This section is divided into four parts that must be read in the order presented. To maximize your understanding of my system, do not skip ahead at any time.

Chapter 1: Basic Procedure

■ Picking stocks priced from $100 to $250

■ Taking consistent profits of 15 cents per 100 shares

■ Practice with stop-loss safeguards: max loss $3 44 DAY TRADER JOSH’S INTRA-DAY TRADING METHODOLOGY hpe :TeMcaiso ATE re Execution Order FASTKEY of Mechanics The 4: Chapter Setups Entry/Exit Rules: Golden Intra-Day 3: Chapter ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ nr-a Levels Intra-Day hpe 2: Chapter aktsig ohra-ieadedo-a trades end-of-day and real-time both Back-testing: orders) limit (manual trades access) real-time (direct Executing chart quote 2 Level from directly orders Placing execution order rapid for keys keyboard your Using stop-loss strategy risk: trading Intra-day and procedures step-by-step strategy guidelines exit and entry Framework: profits static max Fifteen-cent trades block 100-share strategy: max Three-tier application trading: intra-day for Rules Golden support/resistance intra-day forming newly Recognizing bell opening to prior whiteboard on levels levels Logging price daily acquiring for procedures and rules Basic levels S/R definite three levels: price prior The candlesticks one-minute using charting: Basic strategy intra-day to framework General Prior rc eesadNwyForming Newly and Levels Price CHAPTER 1

Basic Procedure

Pick stocks priced between $100 and $250.

Stocks in the $100 to $250 range are the best stocks to trade with my system. These are the stocks that react the best to my intra-day enter/exit strategy. They tend to move very fast, and they offer more 45 intra-day trade setups. Also they only require 100-share block trades, thus keeping your commissions fees lower. For instance, if you’re trading a lower priced stock—let’s say in the $10–$30 range—in order to make any money you have to purchase 500 shares on each trade. When you’re trading through a pay-per-share broker, this means you’re paying 500 percent more in commissions on each trade. Even stocks priced at $90 tend to be slow movers and will not react properly to my system. So keep this in mind from now on: if you’re accustomed to trading stocks priced under $100, you cannot trade them with my system. Soon you’ll understand why.

■ The Best Stocks to Trade with My System

The first point I want to make is that the stocks you pick now will be traded with both intra-day and swing systems. Most S&P 500 stocks priced $100–$250 will be sufficient to trade my system. Most will be blue chip stocks—these are Wall Street’s stocks! 46 BASIC PROCEDURE IUE1.1 FIGURE o edt ei efc htmwt orsok o utget must You stock. your with rhythm perfect in be factor.’’ to ‘‘rhythm the need particularly You method, trading my applying at get stocks Street. traded $250. Wall consistently on above most and the been room of trading never my one have in is and IBM reasons, straight those years $100 For day five above trading entire than been your more have IBM, for period—perhaps like stocks, extended Some an career. trading with for remain stocks you that same requires the trading of system My guesswork. scary hr trmie bv 10 hnIsatdtaigi again. it trading started I Then start $100. chart earnings, above you the after remained back in shot until it see then where and can release $100 you below dropped As earnings it BIDU. 1.1, is Figure next in example the great A until again. it wait trading and it trading precise a follow: Here’s to consistency. rule their always proves have This should $100. and above dates remained release earnings of couple a experienced h oefmla o eoewt orsoks,tebte you’ll better the stock(s), your with become you familiar more The ikn tcsshould stocks Picking stop immediately you then $100, below fall does stock your If releases earnings consecutive two least at had have must stock The have should company the that is criterion important very Another n eandaoe$0 o netr i-ot period. six-month entire an for $100 above remained and IU2DyChart 2-Day BIDU not ellk uln et.I should It teeth. pulling like feel not be BASIC PROCEDURE 47 stocks. + EST—only during market hours. P.M. and 4:00 A.M. Level 2 chart, you will certainly see some humongous In this manual you’ll be viewing several charts with $100 For instance, I’m currently trading GS and TSLA. I can guarantee If you’re a greenhorn and you’ve just read that and you glance at Later I show that, while the bid/ask spread is not so important Why? Every three months, you have earnings release dates. Your pre-market that TSLA moves at least three times faster thanreleases, GS, and TSLA that at will earnings gap up/downtheir three price levels times are as not much—even very different. when to know its patterns—theof speed speed. of its price movements, or its lack a spreads between theand bid/ask on prices. weekends You asThe well. will This only see is thing this normal; youto it after should determine doesn’t hours if mean remember a anything. for stockthan now 25 between cents) is $100 you and that want $250between to when 9:30 has make trying sure a that tight the gap time (less that you watch is with regard to swingspreads entries, can’t for be intra-day thattrading entries far intra-day, it’s apart. a spread The critical;trades—that that’s reason the too applies for wide this to willbefore, is make both ideally you when entries the miss you’re and your spreadthan exits. should 25 cents. be As only I’ve a mentioned penny, and never more stock may fall below $100 after earningssells is announced off and Wall shares; Street $250 or and just can’t theover be opposite $250 traded happens—it are anymore. AAPL risesprior and Two well to AMZN. great above the (I’m examples 7:1 referring splitconsistently of of until in course they stock 2014.) each to started I AAPL climbing wasmoving above $250. trading much They faster AMZN started than and I APPL wasthey accustomed very ate to, and up most importantly, wayspread between too bid/ask was much ridiculous! ofas In much some my as cases capital $1 the during spread buying regular was market power. hours. Also, the These stocks are great examplesThe of main what point works I best want with toyour my have stock, system. resonate you with stick you with is it that every once day you for find at least three months. 48 BASIC PROCEDURE a n wn eus hnyur onetedtaigteeare there trading countertrend you’re When always setups. swing it and consider day can you fact, In trends. IUE1.2 FIGURE aasopd a ococ— a ogtrdo it. of rid get to had pre-market choice—I the no once had but Many pre-market it, I trade have stopped, them. to used data not I use RL. do is to example down. $100, great A over how it data. stocks take and how high-priced just should are even learn I levels stocks, soon whether will pre-market or You the data. list important pre-market my have to must stock stock The a add should of I one certainly is IBM years. stocks. five traded over most for my $250 and $100 between ols.Ti sciia oyu ogtr rfiaiiy Consistency and profitability. more long-term no your trade, to every key. critical a on is is for same This order the less. limit be no a will throw This immediately profit. you’ll 15-cent filled order, you’re the execute once you’ll and entry your know you Once setups. intra-day aecnitn rfiso 5cnspr10boktrade. 100-block per cents 15 of profits consistent Take hr’ n te ao atrta ep edtriewhether determine me helps that factor major other one There’s trade consistently can stocks some how of example an is 1.2 Figure ysse sbsdo taking on based is system My your find you how for framework the map I section next this In e rc eesthat levels price key B ekyChart Weekly IBM retrace rfiso h reversals the on profits hnboe,priual ihour with particularly broken, when onetedtrading countertrend rmintra-day from ohfrintra- for both BASIC PROCEDURE 49 trades (a static limit all . And be very mindful of greed factor stocks. In other words, in order to have a + 25-Cent Barriers 20, and the price has been trending up from that price level, Additional Reasons Why You ShouldOnly Take 15 Cents on Each Trade If you’re trading IBM, for instance, and it’s currently priced at From this point forward, you should put yourself on high alert Also keep in mind that you’ll ultimately be seeking swing trades The key reason why I never seek more than 15 cents on each trade FIGURE 1.3 order). You’ll quickly find thatthe half green your and trades then will retracepoints go back (at into 15 a the cents profit) red. into should Therefore, beturn all exactly a your the profit exit same into at a 15 loss. cents, or you may $154. My system of intra-day trading depends onof the 25 general market cents. barriers Due to thesecents barriers, on it’s each more trade. difficult There to areof profit four day over 25-cent and 25 barriers price at level. any I given list time them in the chart in Figure 1.3. ■ this: suppose you’re trying to get 25 cents on for the ravenous mouth of the and profiting $1.50 or more,more so than there’s 15 no cents sense on an in intra-day trying quick to trade. achieve higher probability of consistentprice, profits you off should the never intra-daytwice try reversals as to in hard get tomuch more achieve than more as 15 sense taking cents; whentrading a 25 platform you 15-cent in cents my start profit. is training testing This program. my will make system on the demo is that small reversals ineven price usually when do I not trade run $100 more than 25 cents, specialized stocks. My goalforming is in to real time. show you how to spot these levels 50 BASIC PROCEDURE aigi h a o ilpotoc o ne oritadytrade. intra-day your enter you once profit will you profit not. max 15-cent the that course understand is now, taking levels—of For these later. this hit revisit thoroughly they I because simply positions barriers long market general 25-cent The hnhr r h etgnrlmre ares(rgnrlresistance general (or increasing): barriers is price market the general when next the are here then tpls fdvsaignw istewr.(hnIsay I (When wire. the hits news both devastating for if stop-loss maneuver I this use to I need day. trade trades. that I stock swing profit if and another intra-day to to stop-loss trading. likely allocate also to swing more I capital that’s in some overnight.) up apply hold free doesn’t can immediately you this those before, holding and With mentioned red the I’ve in I’m if (As this do I bell. closing static have don’t I system. my that into reading built orders after stop-loss head it your call scratching I probably and stop-loss, of opposite. the method stop-loss me—quite alternative against an percent devised 5 goes I’ve position my if or red not n htm rc eesado nr eesaeof ri made I if or off, are levels entry and/or levels mistake. price 9/11? a my but that find it, I say are capital. factors some to up risk free my hate quickly when to I stop-loss need only I blitzed. or I enormous words, is other market In bad!) entire That the mean I rciewt tpls aeurswt a oso $3. of loss max a with safeguards stop-loss with Practice 150,then $155.00, $154. $154. te xmlsae tpls ntedyo nerig release. earnings an of day the on stop-loss I are: examples Other the at is strategy-stop-loss I where situation common most The I that learn will you There 3. Chapter in strategy this elaborate I ial,oeo ybgetraost taeyso-osi when is strategy-stop-loss to reasons biggest my of one Finally, $154. s ttcso-osodr uha xtn rd fIm$0 nthe in $300 I’m if trade a exiting as such orders stop-loss static use fe opeo xmlsblwbcueIko you’re know I because below examples of couple a offer I . 5 then 75, then 50, at barrier cents 25 first 25, … .25 onot do enyutaeshort/ trade you mean intra-day devastating positions. strategy do , BASIC PROCEDURE 51 . exit at a get used to it do not run against you. will The answer to this question So why would you be exiting at a loss when Remember: this is countertrend trading. I don’t expect it to make I’m sure you’ve had this happen: you exit a trade at a loss, and The hardest part of this system is not getting scared when in the ‘‘Why not?’’ you might ask. This system will show you that if you’re For instance, chances are you’ve been taught to stop-loss when Remember that when you use my system, you much sense right now, but II promise don’t that later use you’ll nominal understandexit. why values Think or about it. percentages Ifred to I ($300 determine were loss to a on stop-loss stop-loss 100 every shares), time then I got about $3 90 in percent the of all my past 10 minutes later orgreen, a but day you later exited thewill already, stock make so price this reverses no happenadvanced back dice. to to you I traders the if can in you promisepsychological don’t my barrier. your master fear one-year this program system. Even still struggle with this red. You need thickattempt skin this to without formal be training a maketheir real the profits same day early, mistake: trader. break they cut even, Mostred. or traders On simply who the stop-loss contrary, whenhad when deep just using in held my the system athen you’ll bit it find would longer have that and been if added a you profit. to your position at key levels, in the red, then you’relevels about you to need hit even to stronger enter entry at. levels, those down a certain amounttrade. In or my training percentage. program That’s youreprogram learn you, how the and exact most I opposite. can’t amateurs Icoach do need you that to on without paper. coaching you, and I can’t It makes no sense whatsoever toor stop-loss when percentage. down a nominal value you should be addingwill to take your some current time trade? andframework experience to here, digest. this Even is afteryou learning by can’t the far learn this one system of in its the entirety most on critical paper. reasons why That’s totally normal with my system and you need to loss simply becauseto the swallow, price because runs in against most you. cases This the may price be hard 52 BASIC PROCEDURE aecascmsae,adta’ h utsoe o h 30max $300 the you showed just safeguard. I stop-loss why know that’s inevitably and to You’ll mistakes, need system. classic make this you with that trading intra-day procedures attempting and when rules specific with enforced system. safety this a to the is beginners picking stop-loss for $3 on measure the mistakes Therefore, almost trade. gazillion can to a I levels make intra-day trades. correct will intra-day levels, you your swing that on you the stop-loss not—this guarantee master to course learn you to Of Until need purposes. losses. you learning $300 for take strictly simply is and trade intra-day o edt epeae oei rd neyur on$.Simply $3. down only you’re training a once then enforcing trade yet, exit holding I’m levels to when swing put, prepared red your be the know to in don’t need $300 you you to If translates position. That 100-share $3. a as much easy. as that red isn’t certainly trade It a level. enter swing simply a you of mean $3 not within does you’re This once entry. within swing are your setups should of intra-day you $3 your that once learn positions you’ll trading part intra-day strategy start swing the In lesson?’’ this in you, sorry. showing of I’m instead safe date. be to to instead, how greenhorn, losses be would trades profitable ntenx atIso o eyseictaigsrtg that’s strategy trading specific very a you show I part next the In I the in while trading intra-day to used you get to is purpose My here right stop-loss $3 static a why ‘‘So ask: might you now And cannot testi nuhrgtnw fImi h e,I red, the in I’m if now: right enough this stress . ttc$ tpls rule stop-loss $3 static eefrteproeof purpose the for here onot do CHAPTER 2

Prior Price Levels and Newly Forming Intra-Day Levels

53 In this chapter we discuss the general framework of my intra-day strategy.

I’ve established that the framework of my intra-day method is based on countertrend reversal. To reiterate, this is about waiting on the sidelines for a price trend to hit either support or resistance levels. Whatever direction it moves in doesn’t matter. Either way, you have a trade. If the price travels up and breaks resistance levels, then you’ll have a short position to trade. If the price travels down and breaks support levels, then you’ll have a long position to trade. If you’re reading about my system for the first time, you may be feeling puzzled right now. What I’m saying is most likely exactly the opposite of what you’re accustomed to. Allow me to clarify. My system is based on a principle that flies in the face of momen- tum/trend trading, which is the conventional way to trade. Instead of the usual predicting or guessing as to how far Wall Street will continue a price run, I patiently wait for that price run to hit overbought or oversold price levels, and that’s where I make my money. 54 PRIOR PRICE LEVELS AND NEWLY FORMING INTRA-DAY LEVELS ■ ■ ■ ■ ■ hsscin ee ote as them establish to refer I section. this AD n oo,aeol sdi netn,adi yopinion, my in and investing, in used then. only even useless are they’re on, so and MACD, frames. time short such in not have don’t relevance, simply any indicators other All exclusively. essentials is two chart these the to add I support indicator the technical intra-day only determining The for levels. frame resistance movements, and time price primary on my transparency it most making the offers chart candlestick eeaesm hr-edn pointers. chart-reading some are here For eso nyu cenfo 8 from screen your on session screens Note: iwn n recognizing and viewing te od,yune ob bet e ahoemnt candlestick one-minute clearly be each to has see candlestick each to and able day, definable/visible. entire be the for to screen the need across you words, other e’ ea h ai lmnso nr-a rdn nm system: my in trading intra-day of elements basic the recap Let’s in provided are answers The ask. might you levels?’’ price ‘‘What iue21i neapeo n-iuecnlsikchart. candlestick one-minute a of example an is 2.1 Figure on based is method trading intra-day My otidctr,sc sBligrbns ioac ie,and lines, Fibonacci bands, Bollinger as such indicators, Most ’leaoaeo h he ro rc eesi oet First, moment. a in levels price prior three the on elaborate I’ll I day. the of support/resistance. intraday The my past cents 50 trade the enter I to tiers my max I setups. intra-day on cents 15 take only I ouebar volume never basic togysgetta o ucaea es two least at purchase you that suggest strongly I only fyudnt o’lfidta fyucntve the view can’t you if that find you’ll don’t, you If . before oda nrdytaeovernight. trade intraday an hold hrig s n-iuecandlesticks. one-minute use charting, el omditadylvl rd r h highs/lows the are trade I levels intra-day formed newly ahcnlsikhsacrepnigvlm a.Iuse I bar. volume corresponding a has candlestick Each . h akthsoee htday. that opened has market the he prior three previous A.M. rc ees enn 0 hrsmax. shares 300 meaning levels, price ro levels prior nr-a upr/eitnelvl.In levels. support/resistance intra-day o4 to P.M. hc en h eeswe levels the means which , hnyul aeahr time hard a have you’ll then , rc action price .The 27-inch entire one-minute + trading LCD PRIOR PRICE LEVELS AND NEWLY FORMING INTRA-DAY LEVELS 55 The 12:40 candlestick has a high (#3) of 157.71 and One-Minute Candlesticks The 12:38 candlestick has a high (#1) of 157.67 and a of the candlestick shows both the high and low price in of the candlestick can also show the high/low price. wick body a low (#4) of 157.57.body, and Notice the how low the is high part of price wick. is part of the low (#2) of 157.54.determines Notice the how H/L in price. this case it’s the wick that The Basics of One-Minute Candlestick Chart Reading The The that time frame. Example: Example: ■ As shown in Figure 2.2: ■ ■ FIGURE 2.1 56 PRIOR PRICE LEVELS AND NEWLY FORMING INTRA-DAY LEVELS lasexist always IUE2.2 FIGURE l htmtesi htyuko the know you that candlestick. the is of matters part be that can price All low or high the And system. rcdr.I trsbfr h elrnsec onn ihagathering a with morning each from rings bell the before starts It procedure. rc,yu rvosdywl lashv ihadalwprice, lows. low 8:00 and a at highs begins several and session have high always trading will a new you Each have charts daily always your will on and day previous your price, previous etae vr a nalyu tcs tsciia htyuproperly you that critical It’s can how. stocks. and Here’s your strong them. all log very on are day levels every those traded be resistance, and support both As t9:30 at nthe In laent:teclro candlestick a of color the note: Please eeyuwl er h ai tutr fm nr-a setup intra-day my of structure basic the learn will you Here orpemre rdn eso ilawy aeahg n low a and high a have always will session trading pre-market Your hnte93 elrns o r urnedto guaranteed are you rings, bell 9:30 the When he ro rc ranges price prior three prior A.M upr levels support ,tebl ig o h eua akttaighours. trading market regular the for rings bell the ., rc ees hr r three are there levels, price before n-iueCnlsikChart Candlestick One-Minute 9:30 and A.M. ee otoerne as ranges those to refer I . eitnelevels resistance EST. definite high/low rmwihto which from A.M. upr/eitnelevels. support/resistance osnot does pemre)adthen, and (pre-market) of prior wick each atrwt my with matter always initially and/or eas they because one-minute have trade. body three . PRIOR PRICE LEVELS AND NEWLY FORMING INTRA-DAY LEVELS 57 A.M. , the . A.M. know for A.M not which means the high .justincasepricelevels A.M so I use 8:00 to begin logging current, ., but you do need to be aware. level and the lowest price filled is A.M., A.M resistance . Typically, they’re forming every second, . You have a high and a low there. A.M support/resistance levels come from these definite A.M prior level. . range. support A.M Most active orders start at 8:00 Here’s what to look for. The price levels will appear as dots on Those three The pre-market range is your most Your job is to wait till the bell rings, and then determine exactly Your chart needs to be set to one-minute candles to make 6:00 your market has its firstfrom definable 8:00 to trading 9:30 range of the day. The range is the screen. Use yourprice crosshair(s) levels to at determine each whatpre-market dot exactly trading on are is the your the chart. The highest price filled during Pre-market trading should be observed in realplatforms time. Most have direct this access capability, and on most it starts at 6:00 1. Pre-Market High/Low 1. Pre-market high/low 2. Previous day high/low 3. Daily high/low price levels: If it’s aon heavy pre-market volume high morning alert.9:29 for Other your than stock, that, you then only you use must the be 8:00– do hit. It’s verywill rare hit that between your 6:00 high/low and during 8:00 pre-market trading what the high/low pre-market levels are. You will price range. Our stocks pricedThe volume over will be $100 much lower are than tradedorders regular hours, in placed but regardless, pre-market. then the are importantpre-market price and and relevant. also You’ll a highest have price. a lowest certain until 9:29:59 viewable. You want to see back to 6:00 right up to the opening bell. Once the bell rings at 9:30 and low priceslevels. during At pre-market this tradingpre-market point are data. you Here’s your how. can most see relevant how important it is to log your 58 PRIOR PRICE LEVELS AND NEWLY FORMING INTRA-DAY LEVELS 9:30 utb h ihadlwpie ewe 9:30 between prices They low prices. and aftermarket high high and the the that pre-market be sure take must the Make simply candlestick. including day’s You not previous the acquire. you’re of to price low high/low and easiest price the is This High/Low Day Previous 2. 156.10. IUE2.3 FIGURE h femre n r-akthg/o rcsmatter. prices high/low pre-market and aftermarket the 2.4). Figure (see iue23sosteentire the shows 2.3 Figure hwyui ae etoshwt rd anns nyte do then Only earnings. trade to how sections later in you show I A.M h eitne(ih s171 n h upr lw is (low) support the and 157.13 is (high) resistance The . r-aktTaigRange Trading Pre-Market r-akttaigrange trading pre-market A.M. n 4:00 and rm80 to 8:00 from P.M . PRIOR PRICE LEVELS AND NEWLY FORMING INTRA-DAY LEVELS 59 of both fusion Previous Day High/Low Chart You will find that those levels are not so hard to gather. Keeping When you master the daily price levels, you’re one step closer to Besides their significance, the daily price levels are also the most The daily high/low levels are theand most the important most levels important of levels myAs system traded you in high will volume discover, by those Wall levels Street. are the basis of my 3. Daily High/Low (Resistance/Support) FIGURE 2.4 them up to date is theevery challenge. This single takes a morning big doseseveral before of techniques due the for diligence gathering bell and displaying rings. those Here price levels. I will show you trading the same levels thatyou’re Wall going Street to recognizes. see Againthose how and levels well again the and price withform movements how them. pivot much As at consistency. the or Only smallknow near Wall them. retail It’s Street pro-traders, critical can our to update job them is every to day. thoroughly complex to find and trade.than Therefore, pre-market they high/low levels take and far previous more day explaining high/low levels. intra-day and swing setups. 60 PRIOR PRICE LEVELS AND NEWLY FORMING INTRA-DAY LEVELS rdn ltom os,sc sMC ie,Bligrbns R%, bands, Bollinger lines, on. MACD so as and such boast, levels platforms those trading price use on traders day depends do Street They Wall system levels. indicator. chart my other much any than how more said just be understand can’t to hands-on. and it coached be but to redundant, need you being this learn I’m to only know enough: is book I this framework. Remember, skill. the and focus require does It intricate. scenarios steps.) tougher baby add taking I just we’re trading, now swing For the rules. intra-day to and only first get you’re setups you when learn intra-day Once to trading. the easier are you levels teaching daily the I’m because setups. complicated more intra-day is in trading than swing in function their However, levels. s hntaigeute.Fgr . sasml al candlestick support/resistance daily or pattern simple definable a no has is it 2.6 glance ever first you’ll Figure At that chart. equities. reversals trading price when for indicator use important most the are before system. money my trust of to lot started a and junk lost junk my He some the seminar. of dumped with two-hour he along one a at system from learned my screenshot he with that may a trading This actually was trade. it’s who a greenhorns into but entering beginner, for a levels impress price right the especially the harder, of much exacting decisions real-time makes and confuses It decide. , them of know help sense to They false them a that. need with they lines do thinking those to to relate trainees greenhorns their the that because teach true is programs This trading themselves. levels darting most those price on the more on lot than a lines depend squiggle they and indicators, chart more or h igems motn atrta ittsapiervra steprice the is reversal price a dictates that itself. level factor important most single The epmninn rc ees rmti on nyuwl begin will you on point this From levels. be price mentioning can keep I it but hard, isn’t levels daily the gathering that said I daily same the utilize I trading, swing on chapter the in (Later, o o,js eebrti:tepielvl nadiychart daily a on levels price the this: remember just now, For information. much too way of example perfect a is 2.5 Figure two have may readers my of lot a but obvious sounds that know I not s the use edn indicators leading htms nonprofessional most that PRIOR PRICE LEVELS AND NEWLY FORMING INTRA-DAY LEVELS 61 Daily Chart: LNKD Too Much Information FIGURE 2.6 FIGURE 2.5 62 PRIOR PRICE LEVELS AND NEWLY FORMING INTRA-DAY LEVELS tc aktsiluses still market stock ■ ihayhg ereo etit.Trelnscosscigand cross-secting lines Three certainty. does chart of a on degree converging high any with for gauges indicators represent leading real-time only most they transparent that find most to going the You’re trades. are levels price because on.) later that to return I volume. reading time hard use a rarely have novices an I properly. but is it worthwhile, volume that’s one (Yes, other volume. only the with indicator, levels price combines that software firms trading Street highly Wall most leveraged orders, entry/exit their determining When else? anything with began market stock price The major important?’’ the with again chart indicator. this other no you and show levels I Later levels. price ordiyhgs(eitne.T n hmo the procedures: on these them with if find To even (resistance). highs levels, daily your the all log price. current You the levels. off current, $50-plus most daily they’re the with formed start you recently But years. most 10-plus as far as back view h al eesi n hn.Lann o otaete ssomething is them trade to how entirely. Learning else thing. Finding one framework. is the levels you daily very give the they’re just think I may here you because levels, That’s daily simplistic. dictate that rules view the to read settings you chart your set You use. analysis. we all That’s levels. price yourself real setting use you’re get Just but I failure. off, whistles? for going and up fireworks bells like bogus cool, those looks with it screen that your up clog why so o utlantebscrlsadpoeue o acquiring for procedures and rules basic the learn must You alSre ssdiypielvl,nts-aldlaigindicators, leading so-called not levels, price daily uses Street Wall so levels price daily are ‘‘Why me: ask might you now Right o aetobscpielvl:yu al os(uprs and (supports) lows daily your levels: price basic two have You to able be must You pattern. candlestick a to chart your set You idn n ogn al ihlwpielvl novsbscchart basic involves levels price high/low daily logging and Finding hr n tr cnigt t etutlyufidtefis adethat candle first the find you until left its to scanning start and chart ofidthe find To al lows daily htshappened what’s oka h otcretdyo h candlestick the on day current most the at look , real not rc eesfrbdak owyuse why So bid/ask. for levels price enyubyo ela htjunction, that at sell or buy you mean u not but only s lc-o high-frequency black-box use htwl apnnext happen will what real daily rc ees n the and levels, price al chart daily adetcs When candlesticks. al level daily lag o start you , meaning , —not . PRIOR PRICE LEVELS AND NEWLY FORMING INTRA-DAY LEVELS 63 , on each side left and right , meaning the at least nine days with established daily level left and right four candlesticks candlesticks to its , look at the most current day on the candlesticks to its at least four lower daily highs Daily Level with Highs and Lows This will typically resemble a ‘‘V’’ shape. This will typically resemble a ‘‘pyramid’’ shape. without breaking that level. at least four higher Note: Note: To find the has price level has held for at least nine trading sessions. meaning the price level has held for at least nine trading sessions. candlestick chart and start scanning tocandle its left that until has you find the first Figure 2.7 is a basic illustration of a sample Note that each price level has at least Once you start gathering the proper price levels, you’ll find that FIGURE 2.7 ■ highs and lows. there are several daily price levels that match this basic criterion. of the daily price level.straight This means the price held for 64 PRIOR PRICE LEVELS AND NEWLY FORMING INTRA-DAY LEVELS IUE2.8 FIGURE ■ ■ eeaesm ue htwl epyueiiaesvrlweaker several eliminate you help will that levels: rules daily some are Here o o utgtfmla ihtecatadgtue oloigat looking to used get and chart later. the better with levels). this (price familiar candlesticks understand get the will just trumped a now You it was For level. 01/29, 235.37 would daily on the you 234.83 later, once time previous but candlesticks in level, four point price level, one 234.83 confirmed at the using that been Note have instead. 235.37 the log nti aeyusml irgr h 3.3diypielvland level price daily 234.83 the disregard simply you case this In process. this illustrates 2.8 Figure fyuhv oeta n al rc ee ihn$.0o each of $1.00 within level lowest/highest. price the daily choose you one then than other, more have you If be should level daily Each al ee Process Level Daily 10 rmore or $1.00 hnteother. the than PRIOR PRICE LEVELS AND NEWLY FORMING INTRA-DAY LEVELS 65 : Unless but still over a year $5.00 off other daily sides. At that time it . both February 29, 2014, would more than before to its left and right. . Then it must be was or is an all-time high/low over 30 days Daily Levels Over a Year over 2 years The price level And/or it has Or it’s levels. Another rule is to disregard levels over one year (52 weeks). I’m writing this on February 19, 2015. In order for the price levels Note that the 257.56 daily price level on September 11, 2013, has Figure 2.9 illustrates when daily levels are FIGURE 2.9 ■ ■ ■ to be relevant today, the daily levels at least 30 days holding consecutively on relevant. And ittoo also weak. shows dates that drop off because theyhave are to have atholding below/above. least 30 consecutive days on each side of the level 66 PRIOR PRICE LEVELS AND NEWLY FORMING INTRA-DAY LEVELS IUE2.10 FIGURE he otso h al hrs h a ueapisqieoften. quite applies rule gap The charts. every daily pattern this the see on typically months will three You date. release earnings an after candle the have support/resistance. to on need confirmation not for higher/lower do left you the means to overnight more or $10 of today’s them. in approaching year is relevant a price days—remain current criterion—over the 30 when than the especially more trading, meet for that holding going Levels and it’s if old today. level strong relevant extremely an be be better to had it then old, is level the for off hold doesn’t $1 left. it the than because to anymore, more days it 30 It’s use can’t 2013. you 26, 255.84 but the level September have 257.56 on You right. level the price to just daily look Now high. all-time an was hne r htwe hshpes tsdet ao rc run price major a to due it’s happens, this when that are Chances the is importance equal Of price your if that insure to is rule critical this for reason main The a Rule Gap gap ue iue21 hw o gap a how shows 2.10 Figure rule. PRIOR PRICE LEVELS AND NEWLY FORMING INTRA-DAY LEVELS 67 don’t rhythm consider because you , I discuss the consider of the February 25, 2014, candlestick is low of the February 24, 2014, candlestick is 218.36, high evel. The Truth About Day Trading Stocks high l . To reiterate, each stock has its own unique rhythm. If you just GetYourDailyPriceLevelsLogged and Organized Different rules for different stocks: this is why training on any Note that the For instance, certain stocks do not need exactly 30 days holding. The rules I just mapped out on gathering daily price levels are This price-oriented day trading system can only be learned from trade these levelsI simply promise you because will lose they’reare all procedures your hitting. to money. follow, If There and is the you a system process, do will and tell there that, you the exact price particular stock takessystem. weeks, In if not months, to fully grasp on my and dually note that the And with some stocks you need yourto levels at the least $2 standard apart as $1. opposed time, These especially are during gray earnings areasturmoil and that season, error emerge if and you from that don’t time know can this to system be entirely. a time of about 90 percent of whatremaining you 10 need. percent, and You that’s alsopossibly where need span things awareness all can of the get the going rules tricky. to that I encounter—not can’t apply because to itbecause all can’t certain the be stocks circumstances written and down you’re the here, certain rules but situations and demand procedures. adjustments to practice and application informal real-time. training on The how to handle wise gray areas thing and other to stumbling blocks. do is to get 228.45. The overnight gapprice is level more is than the $10. lowbeadaily of In 228.45. this And, case, the the high daily of 218.36 would also factor apply the framework Ithen sketch here you’re to not allpoint in stocks later. priced sync $100–$250, with your stock. I elaborate this crucial Once you have your daily levels logged, you can begin to ■ trading them. I say that you should only 68 PRIOR PRICE LEVELS AND NEWLY FORMING INTRA-DAY LEVELS htIrfrt smy as to refer I what below or you above $10, $10 is within only stock This approximately pick a $231. are then if that hours, example, trading levels For pre-market low/high pre-market). in $231 of near price trading low and high (the ’lbgnwt rtclrl.T eemn htdiylvl ouefor use to levels daily what trading determine To today’s rule. critical a with begin I’ll ■ ee o hudetra,i n nyi o aei atrd ilget will I mastered. it have you if shortly. only this and to if at, enter should you level ihyrcmedta o otesm.G e htbadfrom 30 whiteboard a a for get $20 Go about same. It’s the do Staples. you whiteboards. that own my recommend on highly also I and traders, day subscribed them. actively log and should you how and these where that is understand so and to critical, need are you numbers now For we’re Essentially, numbers. morning. simple each charts logging the on find we that levels price from acquired I that levels price chart. daily daily the relevant day the previous all the trading. and high/low, high/low, I’m pre-market the stock include each they the Remember: on have trading always day’s They particular that to surrounding pertain walls and my glance on quick several a have at I levels station. sitting. trade price not my why important if reason the away simple see far The to from stations. able trade the be of their to Many at is floors. this trading doing equity were on this pros Street do to Wall learned near I trading markers. erasable while with writing huge in levels price rfrt o hmi yoln rdn omta fe trainees offer I that room trading online my in them log to prefer I logging simply we’re that understand to need just you now For that levels the document each They whiteboards? the on What’s logging for board drawing simple a It’s log? whiteboard a is What al ihPieLvl n al Low Levels Daily Price and of Levels List Price Your High Have Daily You After Do to What onot do osnot does , only s ihrlwrlvl.Ti rcdr etisto pertains procedure This levels. higher/lower use nld figures include enta ftesokpiern o oethan more for runs price stock the if that mean htbadlogs whiteboard ro rc levels price prior ′′ × 40 . ihn$10 within ′′ ittoeeeymorning. every those list I . htbad rfrnw just now, for Or whiteboard. fpemre trading pre-market of daily PRIOR PRICE LEVELS AND NEWLY FORMING INTRA-DAY LEVELS 69 price levels. sheet of paper. Either way, hang it up on the prior ′′ 11 × One of My Whiteboards ′′ The point is to get all your numbers in order, to have those numbers Note that the pre-market levels are trading right around 231.00 Figure 2.11 is a screenshot of my whiteboard. I have many different correct, and to be ready tolearn trade when that that you bell can’t rings. possibly You’re startnumbers. going trading That’s to unless why I’m you making know such yourto a price gather big and deal log of the showing you how wall. You save an entirea LCD screen screen when by you doing have so. a No whiteboard. need to use up FIGURE 2.11 write on an 8 (the pre-market high wasAlso 231.45 note and the pre-market daily levels low atbottom was the column 229.00). bottom shows of the the daily whiteboard.as The low my right- price supports. levels, The which left-bottom will column be shows used the daily high price scribblings on different days. Thiseach is stock just that one I example.be I actively LNKD. use I trade one logged each for bothlevels, day. and my then This pre-market I decided example and which previousthis happens daily given day levels to day. should high/low be on the chart for 70 PRIOR PRICE LEVELS AND NEWLY FORMING INTRA-DAY LEVELS akt rvosdy rdiylvl.Wa atr shvn your pre- having the is is matters level What price levels. the daily whether or matter day, previous doesn’t market, it point this At ■ more day. even every is in sheet filled it log keep the on and but one, whiteboard important, Keep the so. is of whiteboard screenshot A the wall. on my data the with corresponds It a use also I levels. resistance. price my prior as used be will which levels, 2.12 FIGURE oietelge aai h rttoclmsi iue2.12. Figure in columns two first the in data logged the Notice Whiteboard o Your Log ro rc Levels Price Prior Prior Before PriceLevelsona h pnn Bell Opening the o sheet log o the for PRIOR PRICE LEVELS AND NEWLY FORMING INTRA-DAY LEVELS 71 that price levels prior newly forming price levels intra-day support/resistance. . Have your support levels in one bell at the New York . A.M. the bell. newly forming numerical order after High (Resistance) and Low (Support) Price Levels (resistance) price levels, and the right column has all the high (support) price levels. Next I show you how to recognize the For the table shown in Figure 2.13 I simply transferred all the price At this point I’ve shown you the basics of reading the daily chart Learn how to recognize are created all day In Chapter 3, I showusing you the how to 3-tier take max theseprocess system. levels of For gathering and price trade now levels. them you by only need to absorb the FIGURE 2.13 needed before the 9:30 prior price levels in levels from the LNKD stocklog example sheet, on and the then whiteboardhas put and/or the them the in descending order. The left column column and your resistance levels in another. and the one-minute chart, and how to gather all the low 72 PRIOR PRICE LEVELS AND NEWLY FORMING INTRA-DAY LEVELS adetc;ti swa enby mean I what is this candlestick; ilb n fsvrlta aepeiul rpe rcibdto climbed or dropped previously have that several of one be will is learn to way framework. best this the reading course, by of just But not means. hands-on, this of all what explain over. all process does want not do the you breaking first resistance, candlesticks fourth intra-day or an third, forming second, the is level price the if candlesticks fourth or third, second, an forming that’s level the of h rt u it but first, the resistance lowest intra-day an forming in intra-day. happen top, or will bottom to This has price-run that point some at bell. run, price the after minutes five first the least the at take on the must then your focus which window, on is that breaks do during them trade to of most a thing none will have if day don’t But you the those. and of of whiteboard one trade off initial traded Your be minutes. likely five first the within nothing that rings, bell the after minutes five first the will in because is This candlesticks ee otk hp.Atrtefis v iue,you minutes, five first the After shape. take to level o ih s:‘Wihsol etefis adetc?’Tefirst The candlestick?’’ first the be should ‘‘Which ask: might You that illustrations with you provide I sounds. it as hard as not is This the mention I When lo ahcnlsikatrtefis a i the hit can first the after candlestick each Also, Five a need you rule: this Remember fcus,ti does this course, Of candlestick. ra h rtcnlsikspielvl hnyuhv osatthe start to have you then level, price candlestick’s first the break may form rc ee fthe of level price first consecutive hnterssac rc ee ilb the be will level price resistance the then , aecetdthe created have otae eas ttksa es htln o nintra-day an for long that least at takes it because trade, to candlestick. ocnr utial nr-a upr/eitnelevel. support/resistance intra-day sustainable a confirm to a’ break can’t adetcsmasta neyuhv nintra-day an have you once that means candlesticks n atclrcandlestick particular one support nr-a support/resistance intra-day not first lowest/highest t rc ee.I h eod hr,o fourth or third, second, the If level. price its first enyuwnttaethe trade won’t you mean adetc.I o’efriga intra-day an forming you’re If candlestick. hntespotpielvlwl ethe be will level price support the then , newly nr-a upr/eitneo h day. the of support/resistance intra-day omn upr/eitnelevels, support/resistance forming iiu ffiecneuieone-minute consecutive five of minimum consecutive breaking rc,Imrfrigt h price the to referring I’m price, o ntne fyou’re if instance, For . the adetcs Likewise, candlesticks. o ontwn the want not do You . low same highest may prior high on fthe of point rc ee of level price aeastock a have on fthe of point rc levels price rc level price first PRIOR PRICE LEVELS AND NEWLY FORMING INTRA-DAY LEVELS 73 than lower higher candlestick must be candlestick to hold to price in each) as shown one candlestick must be first first highest ,the ,the resistance support Previous Candlestick Higher than the Previous One than the previous one (use the in Figure 2.14. than the previous oneFigure (use 2.15. the lowest price in each) as shown in When forming intra-day When forming intra-day higher To reiterate: FIGURE 2.14 ■ ■ an intra-day lowday or support high. or Whether resistance, the the stock first is candlestick forming must an be intra- the previous onecandlestick when must be forming lower than intra-day theday previous support. resistance one In when other and forming words, you intra- the need only first the left. 74 PRIOR PRICE LEVELS AND NEWLY FORMING INTRA-DAY LEVELS consecutive rc ee.Ieaoaeti nCatr3. Chapter in this that off elaborate trade I a level. you place price to If prepare can first. you the then level, of support/resistance has level candle fifth price the the that break determine cannot candlestick the fifth on The focus to need you again. over order In resistance). for a point have price highest to support, for point price the If cycle. higher 60-second its climb during or time does lower any candlestick drop at one to first candlestick the next than the want don’t you on fthe of point next your established you’ve once mentioned, I As ■ 2.15 FIGURE faltrecnlsik attefis adetc o’ ra,then break, don’t candlestick first the past candlesticks three all If onigProcess Counting Five-Candlestick the Start You Now two adetcs(h hr n h forth) the and third (the candlesticks sustained candlesticks first rvosCnlsikLwrta h rvosOne Previous the than Lower Candlestick Previous gi,i n os o aet tr h rcs all process the start to have you does, one if Again, . not el omditadyspotrssac,the support/resistance, intra-day formed newly rpcibps the past drop/climb holding fourth ttepielvlo the of level price the at adetc otergto h first. the of right the to candlestick confirmed first el omdintra-day formed newly a hnyunwhv two have now you then , cannot first adetc,then candlestick, ra h price the break first (lowest second PRIOR PRICE LEVELS AND NEWLY FORMING INTRA-DAY LEVELS 75 current level at resistance Five Minimum Candlesticks . How to Count Five Minimum Candlesticks (Chart Analysis) For now, you should simply focus on recognizing the five minimum FIGURE 2.16 candlesticks that it requires to form a newlevel. intra-day support/resistance Also note that the 157.76 intra-day resistance level is the 157.76 at 9:36. Thisfour price candlesticks. Therefore, level once was candle #5 neverprice never broken hits level above in in 157.76 the candlestickprice following #1, you level had (candlestick confirmationNotice #1) that how the was it 157.76 took a eightcandlestick) new before minutes it (or intra-day actually three broke resistance candlesticks resistance. level. past the #5 daily high In Figure 2.16 you have a newly formed intra-day ■ 76 PRIOR PRICE LEVELS AND NEWLY FORMING INTRA-DAY LEVELS ■ ■ 2.17 FIGURE h rtcnl otelf f# shge.Yucnprev hta a level. support as the that above perceive or can at You hooding higher. candlesticks is 6 least #1 at of of left total the that to well Therefore candle as first level. Note candlesticks. the price consecutive minimum this five broke our have never we four following The 157.87. support nFgr .7yuhv neapeo el omdintra-day formed newly a of example an have you 2.17 Figure In xli ngetrdti h hsi,btfrnwIepaiethe emphasize I now for but is, this why 3, detail Chapter greater In in high/low. explain at intra-day I an levels form intra-day to lows rule and 20 now, five-candlestick highs for have intra-day But may day. the you the trading throughout that point show given I any 3, Chapter In fteLsost Come to Lessons the of Hints and Cautions, Reminders, Notes, ee t178 t1:7 h 1cnlsikbtoe at bottomed candlestick #1 The 10:07. at 157.87 at level el omdItadySpotLevel Support Intra-day Formed Newly ’esonhwyune the need you how shown I’ve . o ilol be only will you PRIOR PRICE LEVELS AND NEWLY FORMING INTRA-DAY LEVELS 77 do not force candlesticks to trade and safest consecutive price levels: pre-market, for a trade setup to take prior have the required five minimum to decipher. no maximum or exact time frame be approaching one of the . may do not easiest that form a new intra-day sustained support/resistance, even though you If the pricecandlestick is keeps dropping/climbing trending past inyou the previous one one. direction, Thus this means that each There is place, other than thenew entire intra-day setup day will from develop withintrade 9:30 5 you to to place. 15 4:00. Sometimes minutes Typically, after itcomes each a can along. take Even an if hour youtake before several confirm a minutes an for new intra-day an one pricemore entry level, volatile price it than level may to others.trades hit. The Some thing days to are remember is: previous day, and daily high/low. main reason: those price levelsthe are relatively the ■ ■ CHAPTER 3

Intra-Day Golden Rules: Entry/Exit Setups

78 Do not read this section without having read the previous sections first.

This chapter is hands-down the most fundamental step-by-step portion of my intra-day . Before I begin, however, I want to make one crucial point crystal clear. If you’ve fast-forwarded to this section without reading everything previous to it, then you will not grasp the material. You’ll end up applying what I’m teaching with a one-dimensional viewpoint, and that’s a recipe for disaster. If you are the reader I’m talking about, then I’ll assume that you’re seeking a quick-and-easy strategy to make huge profits right away. That is not going to happen. Anyone who promises that is scamming you, and that guy isn’t me. So please go back and start from the beginning. To the readers who’ve been with me since the first page of this book, my apologies for that tirade. But I have to lecture you a bit also. Even after thoroughly reading this section and committing every lesson to your memory, prior to going live with real money, you INTRA-DAY GOLDEN RULES: ENTRY/EXIT SETUPS 79 . every second and you enter your each before . (the first 15 minutes A.M entry . T second . Then I’ll present guidelines and Golden Rules Never have two entries within 50 cents of each On all your initial trade setups, you must have at Your initial entry (first 100 shares) can be off any Always know your second entry before you enter You must have a maximum of three tiers for each When intra-day trading, your entry price will always Always know your 25 cents past intra-day high/low levels 50 cents past prior levels 100-share trade, it’s imperative that you know your trade. your first trade. least one daily pricethen level no with initial $3 trade. of your first entry—if not, trade setup (300 shares). intra-day high/low or any prior level. other. be a static 25 orlevel: 50 cents past your chosen support/resistance ■ ■ first Rule No. 2: Rule No. 3: Rule No. 4: Rule No. 5: Rule No. 6: of trading). All levels are 50 cents past up to 9:45 The Golden Rules Rule No. 1: first The Rules Explained Rule No. 1: This is all about preparation and self-discipline. Before you enter I’ll begin with the The following Golden Rules for intra-day trading apply to trade. That sounds simple, right? Butknow in your order price for levels, this and to that work, takes you some have planning to and organizing. your ■ will need formal training. Youtrading, can but certainly it test won’t the start systemit to by hands-on. truly paper work for you until you’ve learned procedures that must be followed to the 80 INTRA-DAY GOLDEN RULES: ENTRY/EXIT SETUPS r-rdri ohv ra ln n omte hthappens, what matter no and plan, be great To a money. feet your have cool. all cold you’re to lose get is to they way pro-trader away, great a right a That’s green stop-loss. go they doesn’t and trade initial their have I’d If novice, a was I when now. back hair this gray less knew far I If scared. or worried neyumse hssse,atryuetrataeyuwill you trade a right enter you no the after system, that on this benefits. knowing master psychological are you with trade you Once you provide any will then rule enter this prepared, Following and path. you’re for happens, plan what you matter If trades. his everything. in is planning that fact targets. the execution. absorb profit order to fastkey you your with want that just readjust I do now, to then For how you and reenter show to tiers I ready 4, be third Chapter likely to In or is more job second But Your your tier. heartbeat. next at a the to in run $15 will trade made your just You Great! seconds. lower/higher your find bat. simply a occurs, as levels. that price blind When price the you. as are against trading chances So run you’re countertrend. then is system you, this Remember: against run to happens what the as exactly levels about price your hard with extra strategize plan. to think main you and forces It down doing. slow you’re you make to ees o 5cns(rfi)b h ls ftedy n o aeto have you and day, the you of doesn’t shares, close those trade a the on intra-day by capture stop-loss your (profit) to cents if is 15 way, for entry daily That reverse a first setups. have intra-day your you your of ensuring on $3 of within point level The price setups. swing and intra-day ueN.2: No. Rule profit. a bring must entry first their that think mistakenly Amateurs r-rdrsga st evr ossetadttlyconfident totally and consistent very be to is goal pro-trader’s A within green—sometimes the into back goes price the Sometimes it if do you’ll what of idea no with trade a into jump just you If reflexes, trading your scrutinize to is rule this of purpose main The hsrl steaslt oeo ynwsse,the system, new my of core absolute the is rule This es n al rc level price daily one least no nta trade. initial On all fyour of within a odyu swing your hold can initial $3 fyour of rd eus o uthave must you setups, trade first nr—fnt then not, entry—if 0-hr position 100-share fusion wn pivot swing between never will be at INTRA-DAY GOLDEN RULES: ENTRY/EXIT SETUPS 81 trade each for three tiers (at that time). Once the of swing levels. So intra-day trading daily level . Figure 3.1 illustrates this. maximum enter an intra-day trade unless you have within $3 are or become never profit. + You must have a Daily Chart: LNKD daily price level setup (300 shares). In my system, this rule is the main risk minimizer. This is the Rule No. 3: The chart in Figure 3.1 shows how I waited until the price came up When I teach you my swing trading strategy, you will learn that Of course, swing trades are much more involved than trading a defined one rule that Wall Street doesn’t follow. Of course not! I can current price was within $3 oflooking the for next resistance levels daily to price trade. level, I could start to 232.37, within $3 of the nearest FIGURE 3.1 overnight and then recapture yourthe loss trade the for a next $2 morning by running certain daily price levels daily level. I cover this inthe fact Part that 3. you For should now I just want you to focus on by using daily levels is your first step toward mastering swing. a 82 INTRA-DAY GOLDEN RULES: ENTRY/EXIT SETUPS ep ortaigi hc n ocsyut rd h strongest the trade to you here? work forces can and conservative how check See tiers to levels. three in have to trading yourself you limiting your green, and keeps holding go Not doesn’t close. trade the at your stop-loss if means That overnight. that realize together. you’ll come for when do trades That’s and can shares). ‘‘profit’’ swing 15-cent 100 and ‘‘conservative’’ placing capturing each in on be ($200 up also profits caught $2 you’ll so because be I’ve trades won’t trades, swing you intra-day the system, add you my once to but added hit, to and levels those strong for are waiting at trade I levels The levels. high-risk high-risk low-risk. only at is trading trade day you But dicey. if is risks, trading take day to think dare people trading the and contradicts day word to The oxymoron. applied an ‘‘conservative’’ like that sounds aware I’m surprise. with rdsfr$.0pot,a poe o1 et.Btltsntget not let’s But cents. 15 to opposed ourselves.) as of ahead profits, $2.00 for trades start. should not beginner a system, where swing is the intra-day on and that can setups, intra-day do novice. you the you tiers the on but three shares, you, the 100 about of than each more talking on trade I’m system, tier; this intra- mastered shares per you’ve 300 100 After than than more more trade or don’t day, I saying not I’m poorhouse. the not forms. is that level which strong every setup, trade each to trying on as levels) thing the same find (price to tiers is job three Our strongest levels. $100 support/resistance our intra-day 20 instance, level as For much support/resistance day. single the to every exposure throughout trade our all Very cannot limit trade.’’ must We to us risk. dollars of market of most millions Accordingly, are. with traders guy few trader—a whale a not per shares 300 than more setup. much trade buy/sells Street Wall that guarantee rfrteword the prefer I you is measure conservative Another when trades fewer far place you’ll coaching my follow you If O oreyudrather you’d course (Of ‘‘ conservative. system my makes This I’m but professional a be may I me. for way that be can’t it ‘‘But safe yga st epyuke u fthe of out keep you help to is goal My . obig go mr hn30sae)o swing on shares) 300 than (more o’ hold don’t Conservative? + nitadyposition intra-day an tcscnhv as have can stocks ’yumgtask might you ’’ INTRA-DAY GOLDEN RULES: ENTRY/EXIT SETUPS 83 the prior after of the Golden of each other. all of your whiteboard 50 cents any level. prior entry (first 100 shares) can be off any entry can be off first or any initial have two entries within the first five minutes of trading, or it can be (always being within $3 of one), which is also a Your Never during intra-day high/low possible support/resistance levels. daily price level Rule No. 4: Don’t confuse this with Rule No. 3. That rule focuses primarily on In other words, your The current price is at 155.00, and is starting to shoot up. What price 155.20—Previous day high 155.50—Pre-market high 157.00—Newly formed intra-day high 157.25—Daily price level high Suppose you have these four price levels: In many cases you’ll have more than four levels to choose from For instance, if you have a previous day high at 155.20 and a This rule is fairly straightforward. The main purpose here is to Rule No. 5: the price level. With Rule No. 4 I’m pointingbe out that off your a initial entry newly can formedother high/low prior of levels day (pre-market (intra-day high/low level) or or previous any day of high/low). the prior levels first five minutes, when athat can new also intraday be your high/low first may entry. As have long formed; as you apply levels do you trade? Use the Golden Rules as your answer. at any time throughoutFor now, the here’s trading a simple session. scenario I to clarify expand this on rule. this later. pre-market high of 155.50,may you as should well not be trade enteringthan the both 50 trade because cents with you 200is apart, initial you’re overexposure shares. When basically to less (300 trading risk. shares one max), Also price so consider it’sconservatively. level. If important you This you to have choose two only levels yourstronger within have entry of 50 levels cents, the three always two. very pick tiers the make sure your levels don’ttwo overlap, and to weed out the weaker of Rules, you can enter your first 100-share trade. 84 INTRA-DAY GOLDEN RULES: ENTRY/EXIT SETUPS Note: iue32rpeet h rmwr fm -irstp oethat the to Note Rules setup. Golden the 3-tier follow my entries and of levels framework the the represents 3.2 Figure ■ os hsrl stebcbn fthe of of incremental backbone chance that the a absorb is to have rule helps they This rule before loss. This past target. cents profit to 25–50 will reversing levels run price and support/resistance broken your time, get the of percent 95 that cost). $150. (opportunity you $150 saves rule is this properly, entries utilized 100-share you when that Therefore, past, three mind cents in times Keep 25 off. cents to drastically 50 50 setup 3-tier go entire don’t your you making If risk exceptions. no with levels, 5.0itadyhg eas ht o,i ihn5 et f157.25. first the of cents skip the 50 would skip within I is would too, and that, I 155.50, because of 157.25. high cents intra-day at 157.00 50 level within price it’s because daily 155.20 the of other. $3 each one, within first of your cents decision. before your 50 entry make to second within information your enough are That’s know right? levels to have the always of You some But here. ir,o 0 hrs s10pretm w taey alStreet Wall strategy. own my percent 100 is shares, 300 or tiers, nPr 3. Part in rules. previous the all utilized you’ve trading. of o ilso er h oi eidti.FrnwIcntl you tell can I now For this. behind logic the learn soon will You ueN.6: No. Rule it’s because entry first my at level 155.50 the off enter would I that have we and $3, within level price daily a have to need You o’lrcl htti igedrciet ii oreft three to yourself limit to directive single this that recall You’ll oretiswill until entries it Your applying consider even don’t you because last rule this list I ih10SaeBokTrades Block 100-Share with Strategy Max Three-Tier the Mastering 0cnsps ro levels prior past cents 50 levels high/low intra-day past cents 25 static a l eesare levels All 5o 0cnspast cents 50 or 25 hnitadytaig your trading, intra-day When 0cnspast cents 50 always eete 5o 0cents 50 or 25 either be orcoe upr/eitnelevel. support/resistance chosen your pt 9:45 to up entry A.M taeyta introduce I that strategy nr price entry ,tefis 5minutes 15 first the ., T past . will orprice your always be INTRA-DAY GOLDEN RULES: ENTRY/EXIT SETUPS 85 practice and Three-Tier Max Strategy with their intra-day setups. The reason why is at that In my hands-on training program, I have trainees You might ask: ‘‘What about the other 10 percent of the time?’’ Conservative price levels with small 100-share block trades means In Chapter 4 (the fusiontake on a intra-day 300-share and intra-day swing), loser you’llthat and learn you turn how can do it to this into by a runningFor it winner. now, for however, You’ll a I $2 find want profit you off to a focus on major learning swing the level. intra-day basics. extremely overbought/oversold situations.15-cent Your profits focus adds to on thebucks before certainty seeking the of bell the rings. overall Iflevels, you’re trade and patient making you and you you apply know the youryour Golden 3-tier price Rules setups with will become exacting $45 precision,90 profits then (15 percent cents of times the 300 time. shares) pro-traders go much more than three tiersper and entry. they exceed They 100 shares candollars. Do because you? If they not, have thenit you will millions, should keep if follow you my relatively not directive, safe. because billions, of FIGURE 3.2 not go live 86 INTRA-DAY GOLDEN RULES: ENTRY/EXIT SETUPS atdfryu agtetypiet i,adwe tde ortrade your does it when and hit, to price entry target patiently you’ve your is for means it waited What seconds. 10 every $15 earn you mean the earn or you’ll setup cents, 15 2-tier to trade. a profits each your least be on limit at you $15–$45 will net when you it So sell, 3-tier. Typically to at $1 max setups. and intra-day 100- buy in to on execution $1 $13 per after 100-share max So your trades. $1.00 of block paying each share be off only profit small should a You such trades. make to afford can you later. depth in this explain I profit. iue32ilsrtshwIuetrepielvl o y3-tier my for levels price three use I strategy. how max manual. illustrates this in 3.2 material the tackling Figure you’re when of order of wisdom out the reading of intra-day proof only strategies—both are both was head-scratching learn It you trading. Once were and day. they that level for intra-day good an was that Because hnti nrae h ieiodta you’ll that price likelihood barriers, exit the 25-cent your two increases if through this words, break travel then other not to does In need target) them. profit never of general (15-cent will one the profit than off more max trade through to 15-cent loves the sweet- market barriers, the the be 25-cent targets because to happens the profit numbers; It trading, of your this. intra-day achieve spot keep to of designed to system is need target my 15-cent you In enough: conservative. said and consistent be can’t just It ■ -irstp elte oso-osb 4 by stop-loss to them tell trade. swing I after red a setup, the with in 3-tier they’re around a and they strategy, things intra-day because this turn practice mainly they to When should, how they learned than yet losses haven’t more take they stage, elrings. bell hs tcscnflcut 5cnsi 0scns htdoesn’t That seconds. 10 in cents 15 fluctuate can stocks Those broker, pay-per-share a through trade you when that consider Also ‘h sti?’yumgtak ‘h a’ they can’t ‘‘Why ask. might you this?’’ is ‘‘Why ttcProfits Static 15-Cent of Wisdom the Understanding wn—hswl aealtmr es.Sc usin and questions Such sense. more lot a make will swing—this not P.M. quickly hmigaedand ahead thumbing hnteclosing the when , odovernight? hold ana15-cent a gain ’’ INTRA-DAY GOLDEN RULES: ENTRY/EXIT SETUPS 87 day trading system any One-Minute Chart Figure 3.3 shows how it can take all morning to hit an intra-day Eventually you’ll be in my shoes. But you must learn to crawl before I view the intra-day setups as supplemental income. They help pass The final point I want to make here is that you shouldn’t be trying FIGURE 3.3 setup, but within seconds it pullstrade back can for the profit 15-cent in profit. So no your time, but before it triggers you’re required that deserves to be called valid or safe. walking, and learning to swing isfast-tracking for this sprinters. There system, is or absolutely no for that matter the time while I waitto for the trigger. bigger Because and more I’mtrades profitable for a 15 swing cents trades seasoned anymore. These trader, days,because all I I my plan trades it rarely become that swings place way. intra-day to earn more than 15is cents on to any hit intra-day the trade, swing($200 because on levels your a and goal 100-share run trade). yourdon’t In trade even essence, for the have a smaller to heftythem intra-day $2.00 first. be trades profit placed. You, as a beginner, need to master can go green veryneed fast. fastkey order (In execution. order I get to to make that in this Chapter work 4.) properly, you 88 INTRA-DAY GOLDEN RULES: ENTRY/EXIT SETUPS tbfr n ’lsyi gi:yur okn ttemphr,ntthe not here, map the said at I’ve looking pointers. you’re again: basic I it road; some say are I’ll here and steps, before it the into jump I Before ■ 20 rfi?We o er od wn rds hswl instantly will this full each trades, a cents swing you do 20–25 get to will get sense. learn make that to you setup try additional When swing (or an profit? a profit $2.00 on risk in waiting you you’re cents would when more have trade) Why 10 to is. had even just that or you 5 silly but green, how the Consider in cents 20. 18 hit trade Your happy. here? mind to come mentality you’ll gambling trader, trade the haphazard losing Does a a overnight. truly hold position green you’re you’ll the if and in down And each cents back day. on way all 18 cents the hit all 20 will tumble even trades then get and and your cents, big to of 20 lose try several to to you setup, going If run intra-day you’re pro-trader. to that a guarantee profits become can your never I allow trading. cents, to 50 inconsistent not, cents, start of If 30 you slope don’t setups. if slippery is intra-day instance, that here on For toward lesson profits chance The 15-cent will hit. with you to Stick likely greedy! very get was target 15-cent my in trading but easy, beast. other is you’d whole afterwards a setup, chart is trade a time every real at cents? on Looking 15 certainty billionaire! the with a than that be more predict continue to could going you was If it the how know First, you question. can 20/20-hindsight that heck asked I’m when it love I going kept price exited. it the I that next after then Note the higher, and later. in minute cents form, one 15 to than profited it less level trade, candlestick, intra-day the entered the how I After for shows broke. minutes also finally 15 chart This over planning. took and it waiting considerable do to nta cnro l o a od a aeyu 5cnsadbe and cents 15 your take was do to had you all scenario, that In that know did I but rise, to continue to going was it clue no had I profit?’’ more for longer on hold you didn’t ‘‘Why ask: might You rcdrsadGuidelines and Procedures Step-by-Step with Strategy Exit and Entry of Framework the Observing cannot a ‘hsi nytefaeok’enough. framework’’ the only is ‘‘this say hold htlosing that INTRA-DAY GOLDEN RULES: ENTRY/EXIT SETUPS 89 : this 25 cents after general price barrier is the (the 5-candlestick rule for general market price barriers next .75 our predefined price levels break. And price level. .50–$125 is a standard/general market price barrier, after . So if you enter a countertrend trade entry (prior) price levels, and I’ve shown you how to .25–$125 S/R levels: past your newly formed intra-day high/low 25 cent level past 15 cents into the green. whiteboard .00–$125 50 cents Every There’s general marketport/resistance resistance, levels, when regardless the of stocklevels: breaks intra-day through sup- these price whether you’re entering or exiting a trade. Previously I briefly went over the Each stock you acquire and begin to trade with my system will have Remember the number-one principle of reverse-countertrend trad- You won’t be required to trade using the general market price $125 overbought/oversold price level, thenreverse you’re likely to see the price very next 25-cent level to be tweaked afaster bit. than As others; some I stocks mentioned havereact fewer differently previously, at tiers some swing to levels, trade; stocks and someare move so stocks on. general. The point These is mymajor lessons guidelines reason don’t why you apply needyou, across to it be the will formally take board. trained. you Evenabout This some after patience time is and I to due train a get diligence. I’m marriedstraightforward sorry, to golden-goose but your I strategy. stocks. can’t There offer It’s is a all no simple, such thing. ing: we only enter barrier technique, but50 it cents does help to reinforce why I go 25 and .25–.50–.75–.00. In thisto section enter/exit I an mapyour intra-day the trade. generalities I’ve onconfirm a when shown youresistance/support). how Now you to just need gather at to once know your what prior price or to new enter levels break. remember this Golden Rule: youor enter your trade at exactly My system of entry/exit pointsan is intra-day based support/resistance on level the breaks,to probability and travel that the past once price that continues intra-day level, the ■ ■ 90 INTRA-DAY GOLDEN RULES: ENTRY/EXIT SETUPS n ecigyuta ilb ato yinstruction. my of part be will that you teaching and before, mentioned I’ve the hit to initially it for waiting be certain word past the $1–$2 say as I much When as levels. go will price learn you you swing when In especially strategy. or situations, swing 25 all the or enter stocks won’t all you with again, past the But cents exit. past 50 of cents rule 25 the go satisfies target is 15-cent profit static do my then to exiting, need you’re If you level. price all support/resistance then entry, your on barrier hwtegnrlie fcutrrn ees rdn n o you’re how and trading reverse countertrend of idea general the both show for are 3.5 and 3.4 Figures ■ ue o ohetyadei ohl talclick. basic all some it made help I’ve to cents. exit 50 and to entry 25 both full for the rules run should to you price price why the parabolic understand for $3 to wait another you for travel important to it’s than Therefore, cents hike. very 15 quick is a for target reverse profit 15-cent your Therefore, $3. have conservative. Since likely to time. most they of $1 levels, amount traveled price short high/low relatively intra-day a previous in their happens This levels. intra- day overbought/oversold extremely reached they’ve stocks, priced hntepieapproaches price the When market general 25-cent a break to need you if it: about Think ueo Exit: of Rule ueo Entry: of Rule to likely more times 10 is run price The mean? this does What high- $100–$250 our on runs price the when that consider Also nr Strategy Entry or1-etpottarget. profit 15-cent your neyou’ve Once cents. 50 or teoeyucoeb sn h odnRls,yuwn to want you the Rules), on Golden trade the the using by chose you one (the been has level price support/resistance intra-day the When is o hudete eetrn reiigtetae As trade. the exiting or entering be either should you hits, entered initial ate re execution order fastkey rd,yuei nthe on exit you trade, a iei rasps htlvlb xcl 25 exactly by level that past breaks it time first ortre nr/xtprice, entry/exit target your upr n resistance and support iei eltm.We h price the When real-time. in time initial antsrs tenough. it stress cannot I , steto o edhere, need you tool the is initial ees h charts The levels. iei hits it time o should you broken enter INTRA-DAY GOLDEN RULES: ENTRY/EXIT SETUPS 91 at breakout. hold the position for initial always ($15 profit on each 100-share block) before Intra-Day Entry Levels: Resistance Intra-Day Entry Levels: Support . exit Exit Strategy At first glance this looks like a simple cookie-cutter setup. You will I entered a short position at 158.72. This was exactly 25 cents On the chart setup in Figure 3.6 I illustrate how to apply the exit see this similar pattern all over your intra-day one-minute charts. Had above the newly formedafter intra-day I level entered of theprofit 158.47. trade, target. Within the I seconds exited price at pulled 158.67. back for 15 cents for my strategy. you least a 15-cent profit When you enter a trade you must ■ breaking through a general marketillustrate barrier the on fact that every you trade. enter They on also the FIGURE 3.5 FIGURE 3.4 92 INTRA-DAY GOLDEN RULES: ENTRY/EXIT SETUPS n o’emsee h einn fm system. my execution, of order beginning fastkey the learn mastered target, you’ve profit and 15-cent your of hit price rwe o hudeeueoe n alit call I and one, execute should how you changes It when stop-loss. or day redefines system the current of you my that part told mentioned normal I’ve a as it’s But stop-loss. that tradingprocess.Duringmydiscussionofupdatesandchanges,Iinitially a understand place pro-traders to all likes before, trader day novice No ■ been higher. have going would kept trade have this could however, and fastkey, missed, use to how known not I 3.6 FIGURE ae.FrnwIl hwsm xmlso taeyso-osi some in when stop-loss strategy Instead, of situations. examples clarify red. defined some I easily the show This I’ll levels. in now stronger For $XXX even later. capture I’m I position, when a absolutely stop-loss accumulating makes it to points, pivot sense major as no trades swing use I that Now eidyuaanta I that again you remind mlmn h odnRlsbefore Rules Golden the Implement otoeraeswohv enudrm etrhp atto want I mentorship, my under been have who readers those To h idmo sn taeyStop-Loss Strategy Using of Wisdom The n-iueChart One-Minute olne use longer no oia au tpls exits. stop-loss value nominal every rd,ei nthe on exit trade, taeystop-loss strategy . initial INTRA-DAY GOLDEN RULES: ENTRY/EXIT SETUPS 93 so why .Tobe is—you exit at a In my training do not an intra-day trade mean your net trade is run against you. This is strategy-stop-loss not will cannot hold . As I initially mentioned in this The answer to this question will take time and . Therefore, you must get accustomed to taking a P.M ‘‘Why?’’ you may ask, totally puzzled. This point may be difficult Chances are you’ve been taught to stop-loss when down a certain The hardest part of this system is not getting scared when in the red I’m sure you’ve had this happen: you exit a trade at a loss, and The most common situation where I Remember that when you use my system, you When it comes to applying a stop-loss, intra-day trades are different to grasp, becauseswing—will show this you that system—no ifhit you’re even matter in stronger entry the levels, whether red, those then levels intra-day you’re you need about to to or enter at; amount or percentage. That’s how most amateurs trade. 10 minutes later or a day later the stock price reverses back to the totally normal with my system and you need to get used to it. would you be exiting at aat loss stronger when you price should levels? be addingexperience to to your know. current trade Even afterby learning far one the of framework the here, mostentirely this critical on reasons is paper. why you can’t learn this system program, you learn thebook, exact you opposite need tocoaching you, be and reprogrammed, I can’t and coach you I on can’t paper. doa that real day without trader, youwithout need formal thick training skin. make Most the traders sameearly, who mistake: break attempt they even, this cut or their simply profits contrary, stop-loss when you’re when using deep my in system,a the you’ll bit red. find longer On that and if the added you’dhave to held been your a position profit. at key levels, then that would a complete loss. I explainversus stop-loss. this in Part 5 when I discuss pivotguessed it—at trading the closing bell. Asapply I’ve in mentioned swing before, this trading. doesn’t Swing positions you can hold overnight. loss simply because theswallow, price because runs in against most you. cases This the price may be hard to short-term loss on some trades. This does from swing trades. As you know, you overnight, so you have to closerings the at intra-day 4:00 positions before the bell 94 INTRA-DAY GOLDEN RULES: ENTRY/EXIT SETUPS tdytaig oIv eie eeiini naid. an is repetition decided I’ve so trading, day at that learned close. the at them on stop-loss to ■ ■ ■ hyhtsiglvl.I hpe ,Iso o this you show that I so 4, Chapter trades In full intra-day levels. my your swing holding use up hit when they setting you red you’re when the means normal in which perfectly $300 system, is to This translates position. That 100-share $3. a as much easy. as that red isn’t certainly It level. trade swing a a enter of simply $3 you within mean you’re not once does this of Again, $3 entry. within are swing setups your intra-day your once positions past trading my intra-day all of the date. percent in to 90 $3 instead, losses about got be I then would time shares), trades every 100 profitable stop-loss stop-loss on a to loss were determine ($300 I to red If percentages it. about or Think values why exit. nominal understand you’ll use later that don’t promise I I but now, right this sense much with struggle still Even fear system. program your this one-year master promise barrier. my don’t can psychological you in I if dice. traders you no to advanced so happen this already, make it will left you but green, htyou that eo stels fdrcie o edi at1 satanrI’ve trainer a As 1. Part in read you directives of list the is Below o o att e o sdt nr-a rdn hl nthe in while trading intra-day to used you get to want I now For start should you that learn you’ll section strategy swing the In make to it expect don’t I trading. countertrend is this Remember: o o o utne oitraieteehr-odgs truths: hard-to-digest these internalize to need just you now For oiinps 4:00 past position losyuteopruiyt eatr h mutls oa on today lost opening.) market amount next the very recapture the to call opportunity the I you what allows introduce on shares I of (Later using amount the are margin. and stop-loss intra-day must position you swing then a margin/leverage, of more accumulate you If strategy. exit predetermined a have Always femre rdn) xtyu niepsto y4:00 by position entire your Exit trading). aftermarket Never a ferig ees.Ti sepcal refrsigpositions swing for true especially is This release. earnings of day ee odyu nr-a oiin overnight positions intra-day your hold never odaypsto noa annsrlae(yial in (typically release earnings an into position any hold not olwn hs isi h anrao h ayfail many why reason main the is tips these following P.M tmre close. market at . io trading pivot Never Never odovernight. hold n o a have may you and , fusion oda intra-day an hold hsstrategy This . . P.M. nthe on INTRA-DAY GOLDEN RULES: ENTRY/EXIT SETUPS 95 in either + stocks, so stop-loss caused by + hold overnight—just never into earnings release. It’s can Never allow standard stock-related news to dictateprocess, your except entry/exit when yournews’’ stock wire is on literally MSNBC. Combined hitting withvolume the other on ‘‘breaking factors, the such stock as and the in, how only many then shares should and youIf which think you’re tiers about in you’re just the exiting green,to when that’s stop-loss. in great, the but red. if not, that’s a classic time that you way too risky to hold intotrading, a release, the because once stocks Wall Street we starts trade can easily fluctuate $30 direction. That’s a $3,000 loss,get the even call with wrong. only 100 shares, if you The most prevalent reason for strategy stop-loss is actually the An example of strategy stop-loss would be a CEO giving notice of The above almost never happens with my stocks. Most news is If you know you madestop-loss. a It’s mistake that by simple. entering at the wrong price level, then easiest to follow.emphasis I’ve this mentioned time. it before, and I’ll box it up for the news is very uncommon with my system. stepping down, or when mergersalmost are never announced. Again, happen these with things our $100 already factored into the price, somoment breaking news and has devastating, to be or trulystray otherwise in from the hugely my plan. impacting, for me to ■ CHAPTER 4

The Mechanics of FASTKEY Order Execution

96 our intra-day trades are for only 15 cents. In some cases, such Ytrades form in milliseconds. Because of this, fastkey is essential. You’ll find that when you aren’t using fastkey, your back-testing will show you that several of your setups are in the green, but you didn’t profit. The reason is it happened so fast that you didn’t place an exit order when you should have. This is what makes fastkey so crucial. I know I sound like a broken record when I say that this topic is by far the hardest to teach on paper, and certainly impossible to master without weeks of hands-on practice. This is the single largest reason why new day traders lose on their intra-day trades. Not utilizing proper fastkey procedure will result in poor intra-day trading.

■ Using Your Keyboard Keys for Rapid Order Execution

Figure 4.1 is an illustration of a normal PC or laptop keyboard, and the option it has for placing trades. It makes order execution 10 times faster. THE MECHANICS OF FASTKEY ORDER EXECUTION 97 streaming quote chart. Having Level 2 orders. limit ,and PC or Laptop Keyboard sell/short , Placing Orders Directly from aQuote Level Chart 2 (Direct Access) Note how the order box (the small applet window to the upper Most broker platforms have this function, but very few are true The following three charts in Figures 4.2 to 4.4 show snapshots Trying to learn fastkey on paper without using the demo platform is left) is capable of directly executingsmall trades. box The that applet pops window isgreen up the when when you you press buyyou either long short. F1 or or cover F5. short This and box is red when you sell or direct access. of what your Levelbuy/cover 2 quote charts should look like. They include like reading a flight manual andtraining then first trying in to fly a a flight realconcept. simulator. plane, So, without for now, let’s just focus on the You can order directly from the said that, I also want tofastkey, make but it I clear can’t that show I you canin how certainly a to tell manual. set you about it You up, won’t nottraining be here, program able not and to on you’re practice paper, working it with right my until custom you’re demo in layout. my ■ FIGURE 4.1 98 THE MECHANICS OF FASTKEY ORDER EXECUTION IUE4.2 FIGURE n twl otlkl eaprilfil hsi n oerao why reason more one is away, This fill. right partial fill a to be going likely not most it’s will market, throw it you the and if at instance, For order fastkey. 5,000-share of aid a the with even fill, to difficult cases. most in will hits, orders price your your when way, be filled Either will get live. trading trade NSDQ and/or as current it trading keep demo the can when You channel box. this market about worry the Don’t through. as routed NSDQ has box the hr etil r eea aibe htcnmk ortae very trades your make can that variables several are certainly There h pltwno a a has window applet The NOTE: Left/Right arrow key F1 to purchase(bid)theprice. price thataBUYER iswilling This isthemostcurrent your 100sharesat have abuyer willingtopurchase shares rightnow, thenyou If youwant to SELL100 (use left/rightarrows tochange) Execution Price = BUY /COVER F5 current real-timeBid/ Ask. The toprow offers themost is theonlyrow wewatch. The toprow (above redline) Esc = For theFastkeys tofunctionyoumustactivate level IIquotechartbyclickingonwindow. BID SELL/SHORT

= clear allopenorders FASTKEY OrderExecution

ATE re xcto #1 Execution Order FASTKEY execute ordernow $160.20. Enter = = Key Functions To To Make thepriceinappletwindow matchthecurrent current Your priceintheappletwindow defaults toshow the Ask price(160.21) To getimmediatelyfilled: L Qty BID 100 AMZN H H 2US 5.55FO*160.55 FLOW* 5 159.95 UBSS 12 BUY /COVER DA189 MA161.52 161.22 NMRA HDSN 160.97 1 1 EDGA 160.72 158.98 1 UBSS 159.72 EDGA 10 160.44 1 CHEX 159.85 160.38 5 BOSX HDSN 159.94 160.37 TMBR 1 1 BOSX 160.34 CBSX 8 1 8 160.32 EDGX 160.10 FLOW* 160.11 1 160.31 BATS 5 160.12 TMBR 160.28 1 AMEX NSDQ 160.278 CBSX 160.16 1 ARCA 1 8 160.17 EDGX 4 NATX 1 ARCA 1 160.18 1 160.18 AMEX 2 160.20 BATS 3 NATX 1 NSDQ 3 160

Amazon.com, Inc. (Green appletwindow pops-up)

LAST LO HI TIER BID. (RED appletwindow pops-up) aktmkrbox maker market MPiePrice Price MM 21

changes priceinappletwindow 160.24 159.00 161.78 N1 6.0160.21 160.20 AMZN , thenpressENTERtogetorderfilled. 100 : PRESS H SPR. CHG % CHG OPEN CLOSE NSDQ t MM Qty + + 159.03 159.70 F1 0.33% 0.54

key ntedarmexamples, diagram the In . 0 100 sharesat have asellerwillingtosell shares rightnow, thenyou If youwant to BUY 100 to SELL(ask)theprice. price thataSELLERiswilling This isthemostcurrent $160.21 . ASK THE MECHANICS OF FASTKEY ORDER EXECUTION 99 ASK . $160.21 This is the most current price that a SELLER is willing to SELL (ask) the price. 100 to BUY If you want then you shares right now, a seller willing to sell have 100 shares at 0 key

0.54 0.33% F5 159.70 159.03 + + Qty MM NSDQ CLOSE OPEN CHG CHG % SPR. PRESS : 100 , then press ENTER to get order filled. AMZN 160.20 160.21 N1 161.78 159.00 160.24 changes price in applet window changes price

20 MM Price Price (RED applet window pops-up) window (RED applet ASK / OFFER. TIER HI LO LAST

(Green applet window pops-up) window (Green applet Amazon.com, Inc. Amazon.com,

160 3 NSDQ1 NATX3 BATS 160.202 AMEX 160.181 160.18 1 ARCA1 NATX 4 EDGX 160.178 1 ARCA 1 160.16 CBSX8 160.27 NSDQ AMEX 1 160.28 TMBR 160.125 BATS 160.31 1 160.11 FLOW* 160.10 EDGX 160.32 81 8 CBSX 160.34 BOSX1 1 TMBR 160.37 159.94 HDSN BOSX5 160.38 159.85 CHEX1 160.44 10 EDGA UBSS 159.72 1 158.98 160.72 EDGA 1 1 160.97 HDSN NMRA 161.22 161.52 12 UBSS 159.95 5 FLOW* 160.55 H H OFFER 100 AMZN OFFER 100 SELL / SHORT Qty L To get immediately filled: To BID price (160.20) Your price in the applet window defaults to show the to show defaults price in the applet window Your current Make the price in applet window match the current the price in applet window Make To Key Functions Key = = Enter $160.20. execute order now execute FASTKEY Order Execution #2

FASTKEY Order Execution Order FASTKEY clear all open orders clear all open =

SELL / SHORT BID For the Fastkeys to function you must activate level II quote chart by clicking on window. II quote chart level must activate to function you the Fastkeys For = Esc The top row (above red line) (above The top row we watch. is the only row the most offers The top row current real-time Bid / ask. F5 BUY / COVER BUY = Execution Price to change) (use left/right arrows If you want to SELL 100 If you want then you shares right now, willing to purchase a buyer have your 100 shares at This is the most current is willing price that a BUYER to purchase (bid) the price. F1 key arrow Left/Right NOTE: place a 5,000-share order, it’s not going to work. Notice the price level of AMZN. At the $160 level, the charts must ‘‘Why not?’’ you might ask. Because your own order will push the Even if you have $5 million in buying power, and you want to and be old, but that’s okay, the concept never changes. price higher/lower, making partial fills,orders and are that constantly is partially no filled,the good. your window. If consistency your goes right out can we don’t trade withmy much level more of than experience, I 100 veryon shares rarely any per enter given with entry. price more level. Even than at 500 shares FIGURE 4.3 100 THE MECHANICS OF FASTKEY ORDER EXECUTION ie and time, rsliga rfi rals,yu ate reswill orders fastkey your loss, a or profit a buying at you’re Whether selling a you. or have for trades don’t any you placing yourself; program or it system do manual you or orders, meaning ‘‘manual’’ limit real-time orders, on limit based is entry order of system My ■ 4.4 FIGURE (Manual Trades Real-Time Executing NOTE: Left/Right arrow key F1 to purchase(bid)theprice. price thataBUYER iswilling This isthemostcurrent your 100sharesat have abuyer willingtopurchase shares rightnow, thenyou If youwant to SELL100 limit order) (press enterand160.08becomes LIMIT Price = BUY /COVER F5 current real-timeBid/ Ask. The toprow offers themost is theonlyrow wewatch. The toprow (above redline) Esc always = For theFastkeys tofunctionyoumustactivate level IIquotechartbyclickingonwindow. BID SELL/SHORT

= clear allopenorders FASTKEY OrderExecution

ATE re xcto #3 Execution Order FASTKEY execute ordernow $160.20. Enter lcdmanually. placed BID Place yourpriceinappletwindow OUTSIDEofthecurrent ORDERS window. PRESS ENTER,andyourorderwillbecomeaLIMITinthe If youaregoingSHORT, thenmake priceHIGHERthen ASK price. If youaregoingLONG,thenmake priceLOWER thenBIDprice. LIMIT ORDERS:PRESS Limit =

= or ASK price. or ASK Key Functions L t t MM Qty Qty 2US 5.55FO*160.55 FLOW* 5 159.95 UBSS 12 BID 100 AMZN H DN198 DA160.97 EDGA 160.72 1 UBSS 159.85 10 160.44 HDSN 159.94 160.38 1 BOSX BOSX 160.37 TMBR 1 1 8 CBSX 160.34 160.10 8 FLOW* EDGX 160.32 160.11 5 TMBR 1 160.12 BATS 160.31 8 CBSX 1 160.28 160.16 AMEX 8 NSDQ EDGX 160.27 1 ARCA 160.17 1 1 4 ARCA NATX 160.18 1 1 AMEX 160.18 2 BATS 160.20 3 NATX 1 NSDQ 3 160

Amazon.com, Inc. (Green appletwindow pops-up)

Orders) LAST LO HI TIER (RED appletwindow pops-up) MPrice MM 08

changes priceinappletwindow 160.24 159.00 161.78 N1 6.0160.21 160.20 AMZN 100 H SPR. CHG % CHG OPEN CLOSE NSDQ F1 or + + 159.03 159.70 0.33% 0.54 F5 Price 0 100 sharesat have asellerwillingtosell shares rightnow, thenyou If youwant to BUY 100 to SELL(ask)theprice. price thataSELLERiswilling This isthemostcurrent $160.21 all . ei real in be ASK THE MECHANICS OF FASTKEY ORDER EXECUTION 101 . of limit You’re $160.08 voila! temporary ) reads current ask price buy of $160.20. When I hit That sounds so easy,’’ you Wow! below the current bid Yeah, right; assuming that you’ve been onboard this whole This is a great strategy because it gives you some time to get your ‘‘How long does this take?’’ you might ask. That’s another good Easy? After reading Chapter 3 you should know how to scrutinize one- Wrong. The previous fastkey diagram on limit orders represents That is a good question. Most traders are accustomed to placing I’m kidding. We have a longYou way may to wonder go. why we call it a ‘‘limit’’ order. If it’s going to fill Notice that it’s 12 cents order out there. Typically the price will not drop 25 cents in less than question. It depends. The closercurrent you bid/ask, try the to quicker getprice your it to fill will buy price long fill. tosupport was In the price $160.08. this level That case, of means theorder 160.33 the for execution (25 current 160.08 cents trade as above soon had as 160.08). a it I broke placed the 160.33 the level. $160.21 comes down to $160.08. may be thinking. But I caneven assure you truer it’s when not. you And do that this truth with becomes more than one stock. time and know your entry/exitdo prices perfectly, at then this all you pointpress need is Enter, to execute tap your on limit order the in left/right real time—and arrow key right before you Enter the price will execute a buy order, making it a minute candlestick intra-day chartsand and you also should know your how prior to findorsubtractingby25or50cents.‘‘ price the levels, exact entry/exit price by adding order. The order for $160.08 will not fill until the the following scenario: the applet window (F1 to limit orders rather than market orders.trading Typically, and when you you’re place swing athan standard 25 limit cents order, off the the orderand current price it could market is take price, more hours usually or eventraders a days dollar before associate it’s or hitting/filling. ‘‘limit more, So most order’’before with entering/exiting a waiting trade. forcan’t Something be extended that a limit periods fills order, within right? seconds within seconds of placement, isn’t that a market order? done! Now you’re gonna make some money. 102 THE MECHANICS OF FASTKEY ORDER EXECUTION StockCharts.com. pltwno obe to times window enough applet key arrow left the pressing buying were you if instance: level price a choose you and going enter/exit, break you’re levels to your system once my that With find minute. rapidly one to get than to you more trading, need for intra-day open you you’re order when when So eternity fast. an out order is an seconds five seconds—and five n lal.Tepafrsta ohv hs ucin sal cost usually functions those as such have month, do per that $100–$300 each platforms see to The you on Most clearly. allow back don’t one chart. pan they and or one-minute chart back candlestick scroll a one-minute can’t the They on functions. candlesticks those lack day’s platforms previous and day chart candlestick one-minute Once properly. to. back-testing to refer do ready to to you’re system learn methodology, clear trading my a understand have completely you you now that is difference intra-day The forming newly and time. previous real in each support/resistance reconfirming and review- ing and trade roundtrip previous each reverse-engineering you’re properly, progressing. back-testing not not are you you’re then If methodology. trading entire my the is Back-testing ■ nesadhwfskyodreeuinwrsutlyuaeapplying are real-time. not you in until will it works truly execution You order aspects. fastkey non-mechanical how the understand is paper on here offer apn orlf/ih ro e stemcaiso ate.For fastkey. of mechanics the is key arrow left/right your Tapping o’ or;Ihv a have I worry; Don’t can that platform a have to need you First, past. the in form some of back-testing practiced likely most You’ve trades, real-time live or demo either back-testing you’re When htsm ptefskyprino ocig gi,alIcan I all Again, coaching. of portion fastkey the up sums That n-fDyTae ihBack-Testing with Trades End-of-Day and Real-Time Both Scrutinizing orpiewl ealmtodrfrls hnoeminute one than less for order limit a be will price your glue lower fm ytm hspoeshlst reinforce to helps process This system. my of o edt eal ove h current the view to able be to need You . hntecurrent the than free long TradeStation hnyudwn opesEtrafter Enter press to want you’d then , pinfryu ot www.Free to Go you. for option ogtteeeuinpiei the in price execution the get to , bid ThinkorSwim colbc ntm nthe on time in back scroll price. ,and never epan keep Esignal . . THE MECHANICS OF FASTKEY ORDER EXECUTION 103 FreeStockCharts platform. You will , the high/low prices attempt to use their charts for FreeStockCharts FreeStockCharts Do not . only receive direct access information up to the don’t FreeStockCharts Platform trading and charting. Figure 4.5 is a screenshot of the ‘‘Why not?’’ you might ask. You obviously need real-time charting I urge you to register with this provider. Other than are logged as actual pricein levels each candlestick). (the But correct when closing youin high/low view real prices the most time, current candlestick you millisecond. For real-time data, you use your broker’s charts. for my system to work properlyhowever, when at you end-of-day trade. When trading, back-testing, thetime; data you doesn’t just need toone-minute need be candlestick it closes in on real- to have correct data. For instance, once a have to perform some basiclike the setting chart. changes to get your data to look a vertical advertising banner onabsolutely the no right strings. side of Iduct the jokingly tape chart, tell and there my cover are you it will trainees be up. to impressed. Please The just be warned, software grab however: the downloads some in seconds and platform is for back-testing real-time FIGURE 4.5 104 THE MECHANICS OF FASTKEY ORDER EXECUTION exact a o your for tab right. or left the to screen mouse/click the left the drag/pan your use use to will will button You You platform. left. the this to on tabs ‘‘pan’’ use and ‘‘cross’’ to need ever will you functions .T cuiieyu eltm cret nr-a rdn activity. trading intra-day (current) real-time your scrutinize To 1. eeaetoapiain o back-testing. for applications two are Here aesr orcnlsik r e ooemnt n d another add and minute one to set are candlesticks your sure only Make the are These yellow. be will arrows the that note Take hswl raeatikbre ontemdl fyu chart. your of middle the down border screens. you thick two If but a across grief. well, create chart of will one-minute as lot the This work stretch a will to you this have setup, save you’ll split-screen will a this have promise currently I live. go you o’lms rvositadySRlvl fyur o viewing not screenshot. you’re one if on day levels entire S/R the intra-day previous that guarantee miss almost can you’ll I And trading. active when in back-and-forth-back-and-forth up caught be you’re to time have won’t You back. scroll or pan to with viewing need by eye—no back-test naked to the you one-minute allows screen The wider and having monitor. larger so a day, greater the to throughout or smaller trading and trainees smaller 27-inch of get my candlesticks one day to least full recommend at one always buy for I screen, Accordingly, one the activity. on because is fit This can chart. one-minute candlesticks their on back-test can you current recognize session. the trading to throughout you levels helps support/resistance It forming newly trading. day’s current the scrutinizing time. real in of, or off moment trade the to pivotal in correct are either a levels is price what back-testing determine to real-time process Therefore, levels. price your S/R particularly and levels, price (S/R) ihlwpiefrec candlestick. each for price high/low ugtfracul f2-nho rae C screens LCD greater or 27-inch of couple a for Budget critical. is this find will you advanced, more get you Once platform, broker’s your on time real in trading intra-day When and charts your at looking is back-testing real-time Basically, the all knowing on based is system My daily adetc hr.Tedt o ilgv o the you give will box data The chart. candlestick prior newly support/resistance omn intra-day forming before THE MECHANICS OF FASTKEY ORDER EXECUTION 105 , you can easily set the demo in my training program, intra-day trading activity and to . FreeStockCharts clearly Lightspeed end-of-day Here are the primary questions you should ask yourself: on one screen? It’s best to back-test your trades when they’re still very fresh When you use the That border can play tricks withnice your two-, eyes. It’s four-, fine to or17 keep inches, your six-way but split you setupscreens should and with use add them screens at exclusively thatchart, for least because the are two you one-minute can candlestick 27-inch stretch orduring the pre-market whole greater trading chart and across all this day.one-minute screen You candlesticks should always see the committoitasifitwerehomework. Did I have all my priorWas levels my on original the entry whiteboard? price theWas correct I intra-day in S/R rhythm level? with theDid volume I bars simply at falter the at time theDid of fastkey? I the properly trade? use the GoldenDid Rules? I miss a tier inDid my I three-tier place setup? a static entry/exitDid price I and hesitate walk on away initial from breakoutWas trade? and I then impatient chase and trade? frustrated atWas time I of simultaneously entry? in more thanCan one I trade? view the entire trading session (one-minuteWhat candlesticks) obvious mistake(s) can I remember having made? in your mind. When using chart to one minuteyour and first then trade pan entry on orday. the scroll day You back before can to and/or either earlier theback-test back-test that time at same the of the next endtrades morning, of on the meaning, Thursday, day, and if or onyou you Friday you scroll morning can placed back you’re on back-testing, intra-day the one-minute chart to Thursday. you’ll be able to printlog out all your the critical orders. data Your you order needinstance, for window you it will to has back-test columns. properly. For Thevery data basic, you’ll such as need stock for symbol, order back-testing execution time, is number of 2. To scrutinize your 106 THE MECHANICS OF FASTKEY ORDER EXECUTION o ahtp ftaes elta o o’ ofs hmand/or them confuse won’t you rules that the well know so them. trade you’ll overlap of way type That each framework. for trading swing the you and chapter both. intra-day of fusion my before two the learn the you master to show you’ll so I enough two the hard separated I’ve it’s itself. by because system way I’ve this setups. you trading swing taught knowing without it learned You’ve system. ihyrcmedta o obc otebgnigo this of beginning the to back go you that recommend highly I trading intra-day my of framework entire the learned You’ve et.Ti oswtotsyn,btIsyi nwy because anyway, job. it my is say you I reprogramming and but works, always saying, repetition without goes improve- your This reinforce and ments. mistakes your from learn to is trades system. trading my to according trades back-testing your begin and chart, one-minute your the find on points Simply entry/exit (long/short). position and in/out, price shares, h oeproeo aktsigyu rvos(end-of-day) previous your back-testing of purpose sole The eedit reread eoemvn nt at3 nwihIshow I which in 3, Part to on moving before P A R T III

DAY TRADER JOSH’S SWING TRADING METHODOLOGY

Warning: After reading the Table of Contents, chances are this is the section that impatient traders will thumb to. If that’s you, please go back to the beginning of this manual and start your reading from there. Any attempt to fast-forward to here and start at this section on swing trading will result in confusion and/or gross misconstruing and misuse of my system. The end result will be financial loss.

CHAPTER 5

Introduction to Swing Trading: Basic Rules and Procedures

109 Your daily chart price levels help to determine your swing levels.

At this point, it’s crucial for you to already know the intra-day portion of this system. If not, you won’t grasp and adequately apply the instructions on swing trading essentials that follow. If you’ve studied the previous section, then you’ve learned how to use the daily price levels when finding the intra-day setups, and you’ve also learned how to apply the intra-day Golden Rules. Without them, you won’t enter swing levels properly. Why? The intra-day levels help to determine your adjusted swing levels. Without them, your swing entries will be as much as $1 or more off. This is more fully explained in Part 4, where I introduce you to fusion. In this part, which I’ve broken into two separate chapters to help you conceptualize, you’ll learn the more profitable, yet more risky, swing trading strategy. ‘‘Why is it more risky than intra-day trading?’’ you might want to know. It is because you’re holding overnight and potentially with 110 INTRODUCTION TO SWING TRADING hr r eea htmthti rtro.Yul n htuigthis using that find You’ll criterion. this match that several are there for held price the means This straight level. price daily the of o’llanhwt eg nr-a rdswt wn rdsi at4 Part in trades swing with trades on intra-day merge to how learn you’ll either alone, it risk master. to you weeks or takes than you it advanced way, coach more formally much is I trading Whether swing intra-day. So shares. 300 than more ordiyhgs(eitne.T n hmo the procedures: on these them with find To (resistance). highs daily your how are. just levels reinforce price can chart I daily so your here critical redundant be to important It’s levels. level price daily a how level. swing you swing be show a specifically to become can I happen chapter also this setups In intra-day levels. for acquired you’ve levels view to intra-day chart your gather to learned you should you tiers swing which and levels at. swing enter are levels which nize ■ ■ neyusatgteigtepoe rc ees o’lfidthat find you’ll levels, price proper the gathering start you Once least at has level price each that Recall nti ato h etIso nysigtaigstp.Again, setups. trading swing only show I text the of part this In o aetobscpielvl:yu al os(uprs and (supports) lows daily your levels: price basic two price have daily You pick to how regarding rules the recap let’s first But where 2, Part in as Just instructions. technical on started get Let’s hr n cnt h etutlyufidtefis adeta has that candle first the find you higher until four left least the to scan and chart h rc ee a edfra es ietaigsessions. trading nine least at for held candle has first level the price the find you until left has the that to scan and chart candlestick sessions. trading nine least at for held has level ofidthe find To the find To fusion hstpclyrsmlsa‘prmd’shape. ‘‘pyramid’’ a resembles typically This shape. ‘‘V’’ a resembles typically This ihu raigta level. that breaking without o o ymi oli oso o o orecog- to how you show to is goal main my now For . tlatfu lower four least at al lows daily al highs daily adetcst its to candlesticks daily oka h otcretdyo h candlestick the on day current most the at look , adetcs o’lseta oeo h price the of some that see You’ll candlesticks. oka h otcretdyo the on day current most the at look , adetcst its to candlesticks al rc levels price daily etadright and left orcandlesticks four etadright and left o’lne oset to need you’ll , enn h price the meaning , al chart daily tlatnn days nine least at nec side each on o start you , meaning , at INTRODUCTION TO SWING TRADING 111 show . : off other daily Unless hold for a total of needs to hold for at . does not than the other. since the support/resistance daily level more than $5.00 for a swing trade later, when it 10 consecutive trading sessions $1.00 or more 10 days total . Then it must be can still be used to its left and right. was or is an all-time high/low over 30 days daily levels: over two years old Introducing the Ten-Day Hold Rule If a new daily level forms that day, but If a new daily level formsbefore that it day, you can need be tolevel traded, wait formed. five more days 10 days, that level does hold for 10 consecutive days at that daily level H/L. It’s The price level It has Each daily level should be If you have twoother, or then you more choose daily the lowest/highest. price levels within $1.00 of each levels. For example: This is very tricky to express. In my program I literally And you disregard levels that are over a year old. Here is a recap of the rules that will help you eliminate several You can see how the most recent 10 trading sessions held above the Following is an introduction to the breakdown on swing rules. ■ ■ Before you can consider a daily priceyour level current a swing swing level level, and to therefore trade, each ■ ■ ■ ■ least 10 consecutive days. That’s ■ weaker ■ simple system on thesupports and daily resistance. chart produces several results for both 185.59 daily support level. This made thefirst-tier 185.59 swing daily support level level. become So a if the current price of 190.08 were to you on real-time charts.(see All Figure 5.1) I that can reveals a offer swing here level that is just a formed. simple screenshot 112 INTRODUCTION TO SWING TRADING r-salse al eesta aehl for held have that levels daily pre-established the scrutinize you After ■ swing first-tier a 185.59 have the would broke I price the level once swing then day, this on down drop 5.1 FIGURE esos htswe o eemn the determine you when that’s sessions, rssac) nti cnroyudb hrigso fe hyeach they after soon shorting 198.00 be at you’d entry scenario swing this In second-tier (resistance). a and trade), (resistance—short passed gaps. cases overnight some to in cycled due or has profited, over tier and swing hit a already when it’s know meaning to through, is system this of part challenging the with this confuse Don’t level. price upr/eitnelvl htpielvli your is level price That level. support/resistance has that swing level price more. become daily or a days specifically simply 10 is for have tier held swing word that a the essence, levels in use So, price I levels. When daily 2. of Part speaking in you taught I o ntne e’ a o aeafis-irsigetya 195.00 at entry swing first-tier a have you say let’s instance, For ask. may you tier?’’ first a is ‘‘What h e,adteaslt hleg,i ofidthe find to is challenge, absolute the and key, The wn Level Swing First-Tier the Determine to How wn Level Swing daily adetc hr,adyusac for search you and chart, candlestick long position. Tier first-tier nr-a he-irsetups three-tier intra-day sm emfrec swing each for term my is tier 0consecutive 10 wn rc level. price swing rttier first ee ’ strictly I’m here, .Themost first trading swing that INTRODUCTION TO SWING TRADING 113 at subtract when swing levels subtract of that number and , then you need to know all first-tier swing support price level 5 percent . If your price levels are correctly logged of the first swing entry. when they’re at resistance). range add first-tier swing price level within 5 percent rule level) is 176.62. That number is slightly outside of 5 percent This chart is a sample from my online trading room. It shows how In this illustration you have five swing tiers to trade. Later I show I say ‘‘range’’ because I’m trying to find all the swing levels that are In the example in Figure 5.2 you’d have approximately 177.00 as Now that I’ve shown you the framework of the 10-day hold rule in This will make more sense later. For now, just know that tiers are ‘‘What is this 5 percent rule?’’ Essentially it states that once you For instance, suppose you have a The 5 percent rule: The range from first tier to last tier within 5 percent. (38 cents lower). Inreasons some why, cases but thismake here is perfect I’ll allowed. offer sense There just to are a you. several couple They of will reasons also that shed will light on the fact the 5 percent rule islow applied. Note that the final swing support (daily the framework of how you trade theseyou tiers. the For basics. now I’m just showing withina5percent your low end of the 5 percent range. swing, and I’ve introduced you toto first-tier learn the swing levels, you’re ready the amount from the first-tier number (as in are supports, and constantly changing, and ifprobably you’re trading not the wrong on price top level. of them, then you’re break. But here’s theand difficult then part: pulls suppose backthat the for your a 195.00 second profit—then tier tier what breaks at(short do 198.00 trade). you now do? becomes This a first-tier means swing level determine your on your whiteboard, this ruletrue is if pretty you’re straightforward. in Thelogged for same my you is training in my program, online trading where room. I have them already 187.05. All you need to do is take the swing price levelssupports or that resistance, follow. either way Whether the those 5 percent levels rule are applies. swing 114 INTRODUCTION TO SWING TRADING t112)i vr$ f.S o e,n eiini costeboard. the across is decision no stock. see, the you on So depends off. Everything $5 over is percent. 171.26) 5 at the off $2, under or over it’s when level a include that’s but under, or over $1 allowed percent. I 5 why of outside reason slightly one be is to This tier other BIDU. final my the and to compared TSLA slowly like stock relatively movers, moves every fast that stocks trade the of to one need you before, mentioned differently. I’ve as that, 5.2 FIGURE ate rmtetruth. the from farther off enter haphazardly They fail. and every system my biggest try the traders is This why levels. reason swing are they because simply tiers) (all levels o o a elyuta nms ae,you cases, most in that you tell can I now For level swing sixth (the tier next the that is many of reason Another for allow typically I range, percent 5 the determine I Whenever actually it’s stock, priced highly a it’s though Even GS. is stock This wn ee,tikn hywl rfi nec.Ta olntbe couldn’t That each. on profit will they thinking level, swing SEarnings GS not osatrl.I oecssIwon’t I cases some In rule. constant a don’t rd l five all trade INTRODUCTION TO SWING TRADING 115 your first 50 cents to swing entry not levels in this chart. daily your swing level by past , and certainly not your first-tier swing price level swing trades and you’ll need to go a full $2 past. If you’re . In this early point of my instruction, I feel I should make that Understanding Entry and Exit Setup Rules short Note that if a stock is priced at or over $250, you’ll only be looking Note that I refer to the swing levels as In Figure 5.3 are the entry rules, with a quick list of what to do I deliberately built in some procedures and processes that help you Assuming you’ve completed all your chart analysis homework, and To reiterate, the 187.05 first-tier swing price level is What they don’t know is that if they don’t know the price level that , which depends on several factors. for with differently priced stocks. This is because all swinglevels levels can are be daily swing levels, traded. but only certain daily $2 determine which levels to trade.how Knowing many which level shares to to startthis apply at to system. and each Again, entry you’reattain is only your the looking most at difficult part a of framework of how to you’ve chosen today’s swing price leveldo to now trade, is then wait all for you the need price to to run Let’s focus on theThis entry/exit is portion strictly of alevels my screenshot to swing of enter trading how and system. deciding you which exit swing determine at. price level the Of (tier) exact you course will price the trade. most challenging part is ■ works the best for them,saying this system that will the not levels work arework properly. off; for I’m I’m some, not saying but that maylater. certain not work price In for levels Chapter others. may 10, Iprice I touch levels upon discuss are this traded. my again trading room and how the swing level very clear. entry when it first breaks—not necessarily.the It can price be, but level recognizing people is not formally not taught to the tradeevery this same level. system thing assume they as can trade trading it, and as I said, 116 INTRODUCTION TO SWING TRADING nyu vrg rc falfu ir.Btltsntgtahead get not let’s But tiers. four all of price ourselves. 4-tier of pullback a average $2 have for you your reverses it if when on mind, profit $800 in of Keep potential you entry. a critical when that’s swing high setup, the each very But on is $2 potential profit. only profit take $2 your take may that your it is cases receive remember some to you in thing before and day, week, all entire take extremely an to may likely is It very soon. price is and pullback current happen, $2 The small a entered. Therefore you overbought/oversold. before direction one osdrdta h tc rc a otlkl led u $20 run already likely you’ve most has when price especially stock conservative, the very that considered being that’s $150, over most is, reason. strategy consistent, good highly exit for is their answer and right what The traders answers. mixed novice very most have would ask done. than to said were easier I is This If guesswork. no absolutely means that and later. this clarify I target. profit the of only percent sometimes I 50 and take $2, than more take sometimes I straightforward. $250. over when away stay jump just easily system, also can this and stocks day these one past, $2 in go $15–$20 you AAPL if and Even AMZN split). include a the this on (before of you’re examples $250, Great above slope. climbing slippery starts very that stock a formally trading been continue never you’ve simply should if you especially trained, and however, greenhorn, a 5.3 FIGURE fyutk 2pot(20o vr 0 hrs nasokpriced stock a on shares) 100 every on ($200 profit $2 a take you If consistent, highly remain just is now for do to you want I very What are here mapped I’ve that Those rules. exit the come Next nr Rules Entry stop not rdn tc htsoe 20 fyou If $250. over that’s stock a trading erc.S ni o aemastered have you until So retrace. + in INTRODUCTION TO SWING TRADING 117 . and Trust the P.M. profit on your (average price) , then you need + P.M. 50 percent of your profit target one or several tiers at the bell at 3:59 . Later I show examples of when you should swing position at 185.00. For a $2.00 profit, long Exit Price Points Here’s a scenario that will help to clarify the 50 percent profit rule. If your current swing position on Figure 5.4 illuminates the exit price points. ‘‘So why $2 profits?’’ you might ask. You take $1.50 to $2.00 As for the flipside, you should not be selling yourself short by in the green 50 percent or more In some cases you have to exit a trade at your profit target would be to exit at 187.00. But it’s 3:55 the current price is ator 186.10. higher. This This is way you aswing can great trade—50 at time percent least to of lock exittier in your at you a profit 186.00 were $1.00 target. trading Noteswing and that level—you exited the need at to swing 50 trade the percent next profit tier is now. no longer a Suppose you enter a to take your profitshold before your the swing bell position rings.green overnight, It’s 50 not percent not when or worth more you’re of the already your risk in profit to target. the The trade is over. is profits for the same reason thattrades—a you take much exactly higher 15 probability centsmajor of on support/resistance intra-day hitting. is broken Think and about surpassed, the it:likely pullback after to is very a give back 15$2.00 cents on swing on trades, intra-day especially trades when and you’re countertrend at trading. least $1.50 to exiting too soon. I can’tprice tell come you how within many 20 timesmore—this cents I’ve of is seen my the normal. exit stock ButIf but you you pull break should your back consistency, always a in the full wait long dollar for run or you’ll your lose out. profit. take less than your normal profit target. system and earn your money FIGURE 5.4 118 INTRODUCTION TO SWING TRADING ees ferig) o r ebe oee,adyusol just should the you about and after however, (just thinking newbie, season a be are release You earnings earnings). of trade. during times, release the true on at profit especially overnight $1.00 is a hold This than definitely more much will who anticipating I I’m someone because system, As this advanced. mastered or has greenhorn they’re whether system, uldbc o 2pot hnte180 meitl eoe the becomes immediately level. 198.06 swing the first-tier then new profit, $2 a level for 193.28 198.06 back the the pulled once that but Note resistance, swing this. second-tier clarify the to currently first helps is the 5.6 being Figure in to chart reverts The now tier. level swing second-tier your means that safe better but happens, sorry. this than when discouraging shows very 5.5 from It’s Figure retrace scenario. trade. swing this ($2.00 the 192.25 missed and to just you down past), then back level), $1.00 way $194.25 full the the all (not retraces it $194.25 then reaches price current the and trade. ftepiebek any breaks price the If than #1 important Rule quick less for or numbered more are is other.) Neither (They the only. these. purposes with program reference struggle my in to traders misused advanced most continue most the the also Even and disregarded. important and/or extremely are rules two These ■ rfi vr5 ecn fisptnili ra potnt oexit. to opportunity any great a so is level, potential wrong its the of time. off percent first entered 50 the over have profit for may system you this that trading consider when Also use to beginners for wise o more) (or your h 0pretrl spriual odfrnwist this to newbies for good particularly is rule percent 50 The locnie htoc orfis-irsiglvlcce through cycles level swing first-tier your once that consider Also $193.28 is (resistance) level swing first-tier your if instance, For w e wn ue oFollow to Rules Swing Key Two wn nr price, entry swing ontenter! not Do before itn orsigetypie o utmse the missed just you price, entry swing your hitting hsrl ple omte htte o’etrading. you’re tier what matter no applies rule This safety n then and wn tier swing hsrl shgl osraie n very and conservative, highly is rule This . ercsyu 15 o20 rfi amount profit 2.00 to $1.50 your retraces n hncomes then and , ihn2 cents 25 within of INTRODUCTION TO SWING TRADING 119 First-Tier Swing Resistance GS One-Minute Chart The best way to avoid this mishap is good old-fashioned due This rule is critical. If you trade a swing level that’s already been diligence. Back-testing on the one-minute candlestickwhether chart the will price show has already retracedThis and may whether be the hard trade to isthe over. charts, digest so without for my now showing just you be in aware real that time you on may be trading a swing traded (or missed), thenI promise you things risk will get reenteringas ugly into well. very fast. a This goes price for run, intra-day setups and FIGURE 5.6 FIGURE 5.5 120 INTRODUCTION TO SWING TRADING istesigetyadte rfisafl 2i r-akt n hntetier the tier then and next pre-market, the in trade $2 you full then a gone, profits is then and entry swing the trade hits swing your entering this as in viewed you be that saved you can richer. mind just It $1.24 179.56 need trade. to in not your just and important keep on 178.32 $1.24 I Also of very entry setups. Here are swing your swing levels this. example, and price about intra-day pre-market more both that learn recognize you’ll to 4, Part In it when 178.32 is n htshw ftepre-market the if how, that’s And elrns htvrtepre-market the Whatever You rings. trading. bell pre-market in 179.56 hits it your If #2 Rule pay! your earn So levels. price staying your for paid of getting top You’re on price. entry correct your get to caution and loser profit. a $2 holding quick to between times, a minutes difference making all takes key the just at The It levels that’s trade. price levels. and swing its double-check, a price know entering your to to prior and with just stock, especially rhythm your know in to being percent is 90 here is that system Recall royally. this up rule of this screw will training formal your spot-check to minutes 15 about you swinglevelsonupto10stocks,allbeforethebellrings. take only times will master five it you to Once system, three simultaneously. this it stocks, do eight I to morning. up on the morning, in the each early is and minutes night five back-testing at in late and level less, swing level, or each swing double-check a easily can longer You no solution. actually is that level orfis nr f h intra-day opens. the off entry first your locnie hsi r-akttaig si ue#1: Rule in as trading, pre-market in this consider Also merge. setups swing and intra-day how of example great a is This ee adti ytmi ay ttksfcsadptec and patience and focus takes It easy. is system this said never I without system this attempt who traders most that guarantee can I o ntne ups orswing your suppose instance, For wn ee nr price entry level swing initially is fe h elrings. bell the after hits, isduring hits . r-aktlow/high pre-market low nr price entry low is188,yu wn entry swing your 178.82, hits pre-market s o ne at enter you is, wait sa 7.6(og,and (long), 179.56 at is otaeuntil trade to then , netemarket the once wait 0cnspast cents 50 fteprice the if omake to after the . INTRODUCTION TO SWING TRADING 121 . any .This ) is that don’t hold without prematurely trades should minimum at any point swing capital/margin ratio within . . This one rule keeps the risk of holding . Therefore, all your want to have to sell a position margin call . But my strategy is fiscally more conservative. be in the red: this is expected and normal with won’t cash-capital will mean you should be going more than 100 shares on . In other words, if you’re holding leverage overnight, not in their trading account. This means they can afford to in your brokerage account (your non-leveraged buying mean you should be trading that price level (swing tier), trades, but you not 2:1 leverage/margin Buying Power and Trading Experience Dictate Your Swing Strategy Most pattern-day traders who have a traditional broker will have The only downside to having limited capital (25K These two factors are the main issues when you determine what According to SEC regulations, you’re allowed to hold overnight up To recap, the margin call is when you’re required to sell enough at least 25K purchase 100 shares of a $250 stock and hold overnight margin call issues or worries,$125 or, stock. to put it numerically, 200 shares of you may be holding a swing trade for days and sometimes even weeks. creates an inevitable problem when tradingdon’t with forget, my you system, because, swing and that does each swing level. For instance,marginalized with positions my overnight swing strategy you be purchased with swing price level youtier. enter In at, other and words, how justdoes many because a shares swing at level each is swing hitting today, that I want to makeswing this trade very (priced clear. Before $100–$250),shares you and decide you before which you will stock(s) decidecash/capital swing to how trade, many youpower), need and to you consider needintra-day to the and consider swing amount systems. your of level of knowhow with my ■ to a overnight down to a minimum. the 2:1 leverage you’re forced to sell a position if you’re in the red of your losing positions/shares to get your By using your ownovernight: capital the dreaded you eliminate the largest risk of holding 122 INTRODUCTION TO SWING TRADING orcretsigpsto orvret profit. a to reverse to position swing current your you means This hc ir o hudaod vr einri ypormsat by starts program my first-tier in all beginner avoiding and Every trade avoid. should knowhow should you you of tiers tiers which amount which dictate will and The system restriction, this level. with big have experience you one trading is your capital is price however, another per you, shares 100 For to than entered. more tend much level they with so and tier, restrictions, swing these every trade about worried not and capitalized for true just not all is for This but capital. system, and my minimum 25 considered between be capital to of would 25K amount 50K least any and at much properly, example need system basic you position this very Again, your trade a funds. is capital hold This minimum to percent. on 5 having trading full of risk the run You prices 4. the if and price longer 3 stronger recapture tiers to at capital enough levels having not and you against tiers. afford two only final can the you trade if only way, is This then do hit. overnight, to to shares need tier 200 you fourth and all or third then tiers, the percent, swing for 5 your wait within have levels and price four range have percent you 5 simple: many your is in know example and great you days, One once profit. few intra-day a an than for more reverse a last will entering cases to of likely chances isn’t your that maximize trade to swing help will that strategies have I ■ ag.Te a u ecn gis o,adyudnthave don’t you sense. and entire more the make see you, will you this After against all levels. framework, stronger percent the capture 5 to capital run enough can They range. profits have you Whether syucniaie otWl tetdytaesaehighly are traders day Street Wall most imagine, can you As running price the risk you then 2, and 1 tiers trading try you If ‘h?’Frttesaetems ik,telwedo h percent 5 the of end low the risky, most the are tiers First ‘‘Why?’’ eesthe Here’s . cannot 100 wn levels. swing Good real nr-a rd te tcswieyuwi on wait you while stocks other trade intra-day hrsor shares a rdn systems. trading day News! 1,000 o take you , h aeaon of amount same the INTRODUCTION TO SWING TRADING 123 going to trade in 1,000-share block trades. More typically, not Here I have mapped out the framework of my swing trading This rule can’t be overemphasized. In most cases you’ll take the system. In Chapter 6, I showsystem several sample visually. charts to clarify the swing same amount of profit, notrue matter how in many the shares. 100- Thisget is to over generally 1,000-share 1,000 range. shares Thisare per rule position. changes However, when 99many percent you of of my advanced traders trainees quicklytrades start and trading in still 200-share capture block their $2 profit target. CHAPTER 6

Sample Swing Charting Setups

his chapter showcases some very helpful charts. They’re all about Tswing trading setups. These setups are actual historical trades and all of them can be back-tested. 124 Keep in mind that some of the swing levels hit in pre-market, and therefore they were skipped. You can’t see pre-market data on a daily candlestick chart. This is one more reason why it’s critical that you stay on top of your swing levels every day and are watching to see if levels hit in pre-market. I assure you that this is one of the top 10 reasons why non-formally trained traders misuse this system. In Part 4, I provide more charts to help mold a solid understanding of how this system works. In Part 3, however, you only need to focus on the basics: (1) the 5 percent rule and (2) the 10-day hold rule. Basically, you need to focus on swing setups exclusively. You may notice that several of the chart examples date back to 2012. Their age makes absolutely no difference. The rules and procedures that applied then apply just as much to this day. I purposefully chose older chart setups in order to prove that point. Looking over Figure 6.1, you can see that the 151.97 daily level (resistance) held for 10 days, making it your first-tier swing, and you can see that you have several higher resistances all within 5 percent of it. Note that the current price on September 12, 2012, opens just SAMPLE SWING CHARTING SETUPS 125 within $7.50 . They are: swing level way back in 2011. #5 daily levels and fit my criteria for trading. real Daily Levels Note that all the swing levels (daily levels) are more than $1 apart. #2: 154.44 (3/15/12) #3: 157.56 (3/26/12) #4: 159.01 (4/03/12) In this example you have three other resistance levels Depending on your capital buying power and your degree of I chose this particular setup becauseone it’s area. fairly Such easy is to not always see the all case.months of You apart. them can A have in great swing example levels is that the are All that matters is they’re (or within 5%) of the #1—$151.97 (08/27/12) level experience, it may or may(151.97). not For now be you just wise need for to graspwe’ll you the assume you process. to can For trade start convenience all off swing levels, at including the tier risky first #1 tier. under the 151.97 first-tier swing level.swing This price levels is above the it, first but of 151.97 several is your first-tier swing on this day. FIGURE 6.1 126 SAMPLE SWING CHARTING SETUPS orlvl,te o aea40saepsto n hnet profit to chance a and position the 400-share when a $800 have level you one then any levels, four on $2.00 of target profit resistance. to upward heading is price the because ascending are orsigpsto hl nterd hc ol eadyo could or day a be Being could weeks. which couple red, a the be in while position swing for your best work levels which paper, on here trader. only individual the explain, to is it hard tier swing is again, it implied just I and 5, Chapter in things. will read two you on you focus thing should you first now, For The tier. percent 5 the past runs a quite That’s them? absorb to capital the have quandary! don’t you if what But range?’’ percent 5 this in tier outside swing levels the final about the ‘‘What above know: or to want might you point this At ■ eesotiete5pretbbl 5 ag) ol hw# in #5 show would I range). the that’s (5% because bubble red percent 5 further the be outside levels couldn’t That entry. first their reality. into after from go immediately shortly should amateur green trade average every the the think in they error is classic mindset a trading Again, system. this trading day not profit, $2 need your you for levels, retrace all will through price break the easily assume can but price system, the the learning know still you you’re while Second, system. the master ihrlvl otaeotieo ecn.I o int hssystem this didn’t, you If percent. 5 of outside trade to levels higher o have numbers You the case this In order. numerical in they’re that also Note nte adlso otaho ae:b rprdt eholding be to prepared be paper: on teach to lesson hard Another price the when do to what of examples several you show I Later well. as them trade can you is answer The question. good a is That o h aeo epn o er h ais ’else hs price those listed I’ve basics, the learn you helping of sake the For ’ hwn h e oet rv h on htyul lashave always you’ll that point the prove to zone red the showing I’m h ecn Bubble Percent 5 The not outside etaigtefis iri n wn rd eu ni you until setup trade swing any in tier first the trading be orttlsiglevels swing total four vrg price average h ecn ube n htsa xml fhow of example an that’s And bubble. percent 5 the red-zone initially ul ak$2. back pulls irotieo ecn range. percent 5 of tier—outside htcnb rdd n anthe gain and traded, be can that nterdi omlpoesof process normal a is red the in fyuhpe oacmlt all accumulate to happen you If . before h next the full not SAMPLE SWING CHARTING SETUPS 127 than less the price is trade, meaning after (Figure 6.1) and the the 5 percent bubble: chart of the stock CRM. multi-tier swing daily levels it reverses back for your $1.50 daily outside before the split. Each is the same time frame for swing trades (Figure 6.2). before . Therefore, it’s highly unlikely that the price entry points levels. All of them are listed on both charts. I found all daily The red tier is the first swing level Stay tuned. And hang in there. I know this is rough, like doing Keep this in mind: the 5 percent swing range is When you take in both of the charts (in Figures 6.1 and 6.2), the #8: 164.75 (4/19/12) #7: 163.50 (5/03/12) #6: 161.89 (4/13/12) #5: 160.12 (7/19/11) Most swing setups will in fact have multi-tier possibilities. But As soon as I knew all my daily levels, I could do some simple math. Beginning with Figure 6.2, focus on the area that reads ‘‘current a 500-piece jigsaw puzzlehands. I in warned your you about head the without map not any being pieces the road. in your already way overbought will run past the 5 percentto range $2.00 profit. And evento if adjust that your swing happens, trade I so have it rules ultimately and results in strategies a profit. would be bogus. On allrisk swing of trade running levels, far youswing past certainly price the levels do past 5 run 159.01. the percent. In this case you have several first thing to notice is that each is a 10 days. I also5 noticed percent of that my I 151.97 price hadmy level, 5 three and percent other I range. had daily That a levels few made more this all just a within outside typically, the only time you’lllevel have is one the single all-time high, tier no is tiers when after the that. swing I had more than one swing level within 5 percent. My first entry was off #1,08/27/12. the I noted 151.97 that daily this level price that level formed hadn’t back been on broken in those levels according to the guidelines I’ve previously shown you. price on 09/12/12,setups opened on at that 151.09.’’ date.previous I Leading up determined to my that swing day, I had acquired several other shows the This is SalesForce.com and price levels, except one shows the 128 SAMPLE SWING CHARTING SETUPS IUE6.2 FIGURE ee,it’s level, h r tugigwt atr.Teraigo hsmna sa is manual this: know this you sure of technique. make training reading trainees Just my the with The with encounter one-dimensional mastery. same very the with limited, do low-funded struggling I the and are have tier, who initially final the I trade here. only factors trainees key the are experience hits. it if single that’s every But it. above level every profit. $2 a for reversed yet not meaning play, You vntog ’eisrce o to you instructed I’ve though Even hni oe otepol ’ riighnso,fnigand funding hands-on, training I’m people the to comes it When and each into average I level, swing first-tier my establish I Once onot do critical wn ee ihnte5pretbbl,adee outside even and bubble, percent 5 the within level swing rd vr igesigte ipybcuetepielvl hit. levels price the because simply tier swing single every trade nr onsfrSigTrades Swing for Points Entry htyuko hr ti n hte tssilin still it’s whether and is it where know you that fadol if only and if not rd rtte wn price swing first-tier a trade ’ rprdt ne at enter to prepared I’m SAMPLE SWING CHARTING SETUPS 129 . . Once again the trading sessions to five I held 200 shares overnight . Instead of a $2.00 gain (from of the 5 percent range, meaning I to the 50 percent profit rule: if a swing price levels drawn from the daily chart, outside this until it went down to 156.62, or else real more than 50 percent of my profit target of addition hold not overnight (recall the 50% profit-taking rule that cut my profit limit in half on all five trades (500 shares) was $157.62. So the thing held trade at 152.97. It closed at 152.71, slightly in the green my second 100-share swing trade at 155.44 average short for another 100 shares if it continued up to the next daily level Swing Trade Setups This constitutes an My Because this price run was extremely overbought, and my swing On September 14, 2012, the price reached an intra-day high of On September 13, 2012, the price ran toward the next higher daily the average price), I wouldaverage now profit. look to exit all 500 shares at a $1.00 runs past the 5 percentprofit, range, as then I you did only in take this 50 case when percent I of took your $1.00. entry levels were each would have to short on May 13, 2012, at 161.89, entering the sixth position at 162.89. the price ultimately ran back down. It took 161.90 during the firstthird and hour fourth of swing trading. trade$1.00 past. off So Note the that I 157.56 these was two andrange. levels able 159.01 were But both daily to the within levels, price the grab 5past reached percent my that the level, 160.12 so I daily enteredThis level my level and fifth placed 100-share went my swing $1.00 trade entry at 161.12. for me to do was to levels, before retracing toWhen my it hit $2.00 the profit nextI target daily entered level price of of 154.44 150.97. and $1.00 past that level, I discussed in Chapter 5). price ran against me and closed in the red, so swing this trade into theon green. September A 18, couple 2012, ofthat days I was after exited a my all $500 last profit. 500 entry, shares when it hit 156.62; $2.00, so I ■ I’m finished doling outshow cautionary you advice this for setup. theshare On moment. September Now I’ll 12, 2012, I placed a first 100- (26 cents). It was 130 SAMPLE SWING CHARTING SETUPS wn eeswr lowti 10,btIalwdte279 ee oremain to the level traded swing 207.99 I the dollar. full allowed one almost I 207.99. 207.52, but 208.93 the trumped the $1.00, 207.99 and the within 207.99 because The also other). were each levels of $1.00 swing (within 207.99 the by replaced rn agn o ol aewie o the for waited have would You only margin. had no you to able or If been 157.62. only have of would cost you average the times shares * rdn aia.Teestp r oeivle.Te’eagreat newly by a trumped get They’re can involved. levels ones. for swing forming more have older certain you are how what of setups example on These depending enter, capital. to trading levels which for options a nSpebr1,21,adteoeigpieta a was day that price opening the and 2012, 11, 200.55. September on was tier become later. have sense more would make swing for will swing This fourth-tier reversed previous Beware! then 159.01 tier. the is and first your all hit this then levels) if if profit, resistance that that lower $2 aware case mind be this in in (in to keep levels hit—get need Just to you levels swings. strategy, swing multi-tier your strongest on a the minute gain for last to wait day simply that You $158.01. bad. hours at hit few it when a profit for share $200 it a 2, or April held profit, on $2.00 have 159.01 of would level swing You #4 $160.01 2012. the at off shares 2012, 100 12, entered September have would on You hit. to range percent 5 ’eatrse h al ees#,#,ad#4bcuete275 ee got level 207.52 the because 4 # and #3, #2, levels daily the asterisked I’ve o ed8Ki uigcptlt aeta apn hts500 That’s happen. that make to capital buying in 80K need You 5 1.9(9/13/12) 210.69 #5: (5/1/12) 208.93 #4: 3 0.9(5/03/12) 207.99 #3: oiei iue64ta h a nee h first the entered I day the that 6.4 Figure in Notice 2 0.2(3/16/12) 207.52 #2: (8/17/12) 202.00 #1: the Notice a have I Again IBM. for setups show 6.4 and 6.3 Figures so isn’t capital limited having how of example great a is This eu,or setup, v daily five short oiin u nteeeape hwdifferent show I examples these in But position. eitnelevels: resistance * * * dosoff —drops od20sae overnight shares 200 hold highest rc nthe in price ihlittle with , wn short swing 25K then , multi- SAMPLE SWING CHARTING SETUPS 131 overnight. the 207.99 held broke on September 11, 2012, when the price short IBM Setup level (new level) on October 1, 2012. That was when I entered Iplacedmyfirstswing Figure 6.4 represents how I traded a 400-share swing setup. You might ask: ‘‘Once you have your levels to swing trade, which hit 203.00. It never retraced for a $2.00 profit, so I You should study it400 shares with of the this $200 assumption stock.for After that when this you you example I have can show limited other afford capital, options like up trading to with 50K. ones should you trade first?’’each The other, four levels from are #1can within to be 5 traded. #5 percent But of (202.00–210.69). what ifto That this afford was means all your they the trade? levels. You all you’d might If start not with you be the could able first afford at to 202.00. purchase all four, then The next entry wasn’t for about two weeks, when it daily FIGURE 6.3 132 SAMPLE SWING CHARTING SETUPS 264 ohtadi i ekltr nOtbr1,2012. 10, shares October for 400 on waited later, on I week So price a price. did average it average and the my hit on take to $2.00 $206.40 was retraced it now when do sell and to needed I All 209.93 at entered I So levels. two next 211.69. the and break also weeks. to not happened if it days, for up tied being run funding You minimal entry. with your swing of trading first-tier risk you’re a the touch if not why should reason you more capital, limited one is This pullback. before weeks! two swing second my 6.4 FIGURE Fact: o akt h rd eu.O h aedy(10/1/12), day same the On setup. trade the to back Now weeks take can swings first-tier some that reminder a be this Let The vrg price average B 0-hr wn Setup Swing 400-Share IBM short fal40sigetisi $208.40. is entries swing 400 all of t289.Ys o edta ih:Isaid I right: that read you Yes, 208.99. at SAMPLE SWING CHARTING SETUPS 133 level daily 5 percent, so I went with the first level at within Swing Trade with Limited Capital This chart shows my first trade was off the 207.99 Figure 6.5 exemplifies how to swing trade when you have limited In summary, this trade from start to finish took about one month But never forget that without high funds or much experience, ‘‘Why is this?’’ you might ask. Because in the Figure 6.4 example, capital. to make an $800 profit.trade This other is stocks fine while when waiting you this have one out. enough capital to FIGURE 6.5 you want to start yourlevel—in entry accordance with the with second, what third, fourth, you or have. final If you can only afford 202.00 because I had enough capital to average into all four. all four levels were (second-tier swing price level),level. and not the 202.00 first-tier swing 134 SAMPLE SWING CHARTING SETUPS t130.A htpitIhdthree had I point that At 113.08. at the off traded rule). I swing how a it’s shows time This also bubble. percent 5 a within setup 1diylvlt wn rd,bti ee rk ni h gap-down, the the pre-market. until for in broke hit waiting never finally it price was but the trade, so I swing overnight. to level gap-down daily #1 huge the Note traded. you if suggests. Or 6.5 Figure hit. as to profit. trade level a you make 210.69 then you way, shares, the Either 300 for for wait enough you have then shares, 100 IUE6.6 FIGURE oietecretdyi coe ,21,adtepieopened price the and 2012, 8, October is day current the Notice iue . n . hwstp o IU gi aea have I Again BIDU. for setups show 6.7 and 6.6 Figures IUSetup BIDU pre-market daily eesta ol eswing be could that levels ees(ealteentry the (recall levels long rd.Ti setup This trade. multi-tier SAMPLE SWING CHARTING SETUPS 135 entry .Thisis . . According to the less than $1.00 apart 75 cents apart allow less than BIDU Long Entries never Note that 107.50 and 106.60 are 110.06 107.50 106.60 On the next day, October 9, 2012, the price opened at 109.04, Below are the three daily price levels that I had at the time of the but the price hit a low of 108.82 in pre-market gap-down. But at no point was the entry prior to the gap-down. swing rules, I needed to enter my first swing trade as an intra-day FIGURE 6.7 allowed when the price$100, of but I the stock is so close to the minimum of 136 SAMPLE SWING CHARTING SETUPS 02 h rc otne odo ntesm a,s entered I so day, same the on drop past to cents 50 continued price The 2012. at183) n hswsso fe h elrang. bell the after soon was this was and low 108.32), pre-market past first the entered case, I this so In 108.82, level. pre-market the off trade, 6.8 FIGURE aketefso fbt:Fso Trading. Fusion to both: ready of you’re fusion Now the both methodologies. tackle for trading procedures swing and and rules intra-day the my of understanding better layout a same have You the use should You trades. practice. swing you when my information log and I how is This trade. this on $450 profited I average. on $1.50, retraced 2012, htIhdto had I that oeta nee the entered I that Note o’ese h ai rmwr fm wn rdn strategy. trading swing my of framework basic the seen You’ve room. trading swing my in sheet log the of snapshot a is 6.8 Figure nFgr .,Ibe pteae hwn h rfi.Yul notice You’ll profit. the showing area the up blew I 6.7, Figure In h ettosiglvl 175 n 106.60). and (107.50 levels swing two next the hold o Sheet Log l 0 hrsoengt h rc nOtbr10, October on price The overnight. shares 300 all long initial wn nr rd t183 5 cents (50 108.32 at trade entry swing iei i 0.2o coe 9, October on 108.32 hit it time PART IV

THE FUSION OF INTRA-DAY AND SWING STRATEGIES

CHAPTER 7

Introduction to Fusion Trading

he term Fusion Trading is my own. I like to use that term for quick Treference. You’ll see it here over and over, and my trainees hear me say it all the time. But you won’t find it listed on Wikipedia—not 139 yet. And for now, you won’t hear the word fusion on Wall Street unless you bump into one of my graduates. Though the term is my invention, the system itself is not. Fusion is creatively implemented by most professional day traders, especially the countertrend traders. As a whole, fusion methodology gives trading on Wall Street the legendary calibre it’s known for. The more you get acquainted with this system, the more you’re going to realize that the same key price levels that I trade are traded in high volume on Wall Street. Now that you’ve seen both my intra-day and swing trading frameworks, this part of the text will make perfect sense to you (about as much sense as a map makes without your having been on the road). Before I get straight to the core of fusion trading, I want to point out a couple of facts. Most novices call themselves either ‘‘intra-day’’ or ‘‘swing’’ traders without a full understanding of how each distinct strategy works. Some jump right to swing trading (ouch!), and some never advance from intra-day trading to mastery of the swing setups. 140 INTRODUCTION TO FUSION TRADING sta nr-a n wn ehd are methods swing and every intra-day for that strategies is both said of I use (yes, my setup that trade find to going you’re and both, ■ ■ facts: critical these knowing me to profits. orchestrating consistent about achieve to something fail know the fusion, even who much and to experienced, systems, without both tend more using way novices means much scope The hard full disasters. the the that their unaware up from be came scars who the traders showcasing advanced wolves help, and lone alone, be trading to day tend learn to try beginners Most ■ n hti togrsiglvl u a ee agthwto how taught never was I is, But level start level. price to swing intra-day or an them, stronger what differentiate a of is sense good what intra-day a the and got both I charts, never read dailies. to the attended how and learn I coached. did I properly workshops truth. been that and me hadn’t taught seminars I trading fact, professional first the The to regard With facts. eitne ee.Adte,i ytaewsi h e tmarket at red the in was trade my always would if I then, close, And level. resistances oti ihawa nr-a ee hnyur nyspoe obe to supposed only you you’re it? would on when Why cents level thumb, it. 15 intra-day your about profiting weak Think by a it. cliff with do a that this to off do is sense day. hanging only make that as even Not risky doesn’t past it. as it hold teach hold emphatically to overnight I of enough and type strong different, not know were I Now traded I levels day sIv etoe aytmspeiul,fso stesnryof synergy the is fusion previously, times many mentioned I’ve As omte hte hyr einr rnt eyfwtaescome traders few very not, or beginners they’re whether matter No hnIfis tre rdn n19,nbd agtm hs two those me taught nobody 1998, in trading started first I When sarsl,Iwudmsael rd nitadysupport/ intra-day an trade mistakenly would I result, a As htwsacascmsae antflycgiatta h intra- the that cognizant fully wasn’t I mistake! classic a was That nr-a n wn rdn r eymc nelne (Fusion interlinked much very are trading Trading). swing and trading. Intra-day swing to prior learned be must trading Intra-day h r hyNtMtal Exclusive? Mutually Not They Are Why odovernight hold every rd eu)i oal oia.Tereason The logical. totally is setup) trade first ihitadysetups. intra-day with huh htwsokay. was that thought I . not uulyexclusive. mutually INTRODUCTION TO FUSION TRADING 141 makes first . I’ve alluded to this before. This is about rhythm factor There are logical reasons why the mastery of intra-day But many novice traders simply hold overnight and pray that the The ultimate reason to start with intra-day trading is all about I need to get in rhythm with my new stocks because eventually I’m Even I, the founder of this system, cannot start swing trading a new This process cannot be fast-tracked! perfect sense. Mostit’s importantly, imperative when that you you remainOnly start in to the a low-risk learn intra-day exposureinstructed trading, setups environment. to provide minimize that risk,and safety then you’re looking you net. for know quick If exits.held to On for you’ve not much the longer been contrary, hold and swing overnight, usually tradeslearning with are of more swing shares. So trades puttingway and off to starting the get to with know your intra-day stock without setups losing your is shirt a in the great process. stock price goes in their‘‘slippery favor slope’’ image by come the to next mind market here? opening. It Does should. the what I call the Parts 1 through 3 made youor very swing aware that trading, whether you you’reneed need intra-day to to know know your howname pre-market a to data, couple of read and essentials). You you a alsotrading learned one-minute that is mastery prerequisite candlestick of intra-day to chart your swing (just setups. to going to marry them. Iwhile can’t he’s be driving that to guy his who’s blind planning date! his Back wedding when I was a novice, every stock without watching and gettingbasis in first. rhythm with This it process onknow can an how take intra-day my weeks new and stockit even trades trades in months. when pre-market. I it’s I want breakingswing want daily to setups). to price I’m know levels all how over (forthe it: both average intra-day intra-day H/L price and range movements, per the day, speed, and so on. profoundly reading your stock,your just all-time-favorite as song, you just dopartner. as with The profoundly every rhythm as nuance factor you of inside is read and working out, your and when life you you masterfoundation. this know feat your only stocks with an intra-day trading 142 INTRODUCTION TO FUSION TRADING nr-a rt n hngtit wn,adte h uino both. of fusion the then and swing, of into sequence the get with then Stick and meander. first, don’t intra-day path; the on stay Just path. ended way. things hard rhythm, the total learned stock’s I a ugly. learning very to commit didn’t I time rdn rt u liaeyi vr rd ihti ytmyou’re intra-day system learn this you’ll with trade Yes, every swing. in to a going ultimately into but intra-day trade first, your to trading know order must in you Rules, setups Golden my Using vice-versa. levels must swing you why your precisely That’s know setups. swing your with conjunction in how visually understand you help to setup works. trade this sample a show and fail. to going that’s day system next a is the levels on entries intra-day levels mark formed static newly swing the place strong off you you shows has be that pre-market and would system as Any entry trade. such swing every levels, virtually your intra-day then formed levels, newly intra-day for account to it’s if trade intra-day level those an that price enter book daily only a of to $3 you within Remember commands Rules. Golden that the practice rule you $10 had the as I much 2, Part as in be why, could is your This You where at. knowing was without tier trade swing intra-day next an enter to wanted you are levels swing your setup. where intra-day know an to entering need to prior you you way, Sure either exclusively. trade But intra-day can. can’t you saying not I’m money. ‘‘ nr-a rt owa’ htcnnrmabout? conundrum that what’s So first. intra-day us ht o a’ rd nr-a ihu nwn orsiglevels. swing your knowing without intra-day trade can’t You what? Guess What? eeyucnlanfo ymsae.Iv apdotagolden a out mapped I’ve mistakes. my from learn can you Here orga nfsn ohsrtge st lnyu nr-a trades intra-day your plan to is strategies both fusing in goal basics Your the with begin I’ll action. in system the at look a take Let’s failed you but levels, swing strong find to were you If this. Consider Suppose once. at both know to need you why of example an Here’s tsciia olanthe learn to critical It’s ’Icnpcueyuylig uttuh o osatwith start to you taught just I yelling. you picture can I ’’ initially al eescnbcm wn levels swing become can levels daily en h rd ytesiglevels/tiers. swing the by trade the define prior entire o’egigt n nti ato the of part this in find to going You’re ? oetrn n nr-a eu,and setup, intra-day any entering to system prior otrading to without . + conigfor accounting f ormark. your off live ihreal with INTRODUCTION TO FUSION TRADING 143 price levels that on your whiteboard intra-day support price prior level at 173.72. You long prior price levels you will enter your intra-day trade within $3 of a ., with the numbers in numerical order. level). Once you entered the first intra-day trade, and Classic Fusion Trade Setup A.M . No swing level, no intra-day trade—it’s that simple! swing formed in the range of $176.00–$177.00 (within $3 of your level. by 9:30 Below I address three primary guidelines and procedures that clarify Suppose you had a first-tier swing The charts in Figures 7.2 and 7.3 show the the price ran against you, then you could enter again off your Here’s a rule of thumb: swing entry 1. You need to2. know where your You need first-tier to swing be armed level with is. your how you capture all these levelskey intra-day on and Figure swing 7.1. trade It setup-preparations: boils down to these were gathered on LNKD during pre-market on April 4, 2014. FIGURE 7.1 swing would wait to startlevels intra-day trading until the first-tier if Figure 7.1 shows a classic fusion trade setup using LNKD. 3. You apply the Golden Rules once the bell rings. 144 INTRODUCTION TO FUSION TRADING rcs sapyn h odnRls o a ne orfis trade first your enter can You Rules. Golden the the applying created is process also I order. numerical 7.1. in them Figure puts and in 7.2 Figure setup trade the whiteboard to pertain that that at 3, level. Part swing first-tier in a procedures fact and in was rules it swing time the to according that, the you shown level simply I’ve support now, for basic things keep To ■ 7.3 FIGURE 7.2 FIGURE syuko rmyu rvosraig h nlse nthe in step final the reading, previous your from know you As the all listed I’ve 7.2, Figure in convenience, your For pligteGle Rules Golden the Applying hr nFgr .,wihtksaltenmesfrom numbers the all takes which 7.3, Figure in chart hc s137.I o eet akts,yudfind you’d back-test, to were you If 173.72. is which , is-irSigSpotLevel Support Swing First-Tier Levels—LNKD Price Prior rtte swing first-tier prior levels INTRODUCTION TO FUSION TRADING 145 support level, then the price . (the first 15 minutes A.M support . The bell is about to ring. I’m prepared to the Rules indicate you should. The Rules are if A.M Never have two entries within 50 cents of each On all your initial trade setups, you must have at Your initial entry (first 100 shares) can be off any Always know your second entry before you enter You must have a maximum of three tiers for each When intra-day trading, your entry price will always 25 cents past intra-day high/low levels 50 cents past prior levels trade setup (300 shares). intra-day high/low or any prior level. other. be a static 25 orlevel: 50 cents past your chosen support/resistance your first trade. least one daily pricethen level no initial with trade. $3 of your first entry. If not, ■ ■ ’’ Rule No. 4: Rule No. 5: Rule No. 6: Rule No. 2: Rule No. 3: of trading). All levels are 50 cents past up to 9:45 Intra-Day Golden Rules (Recap) Rule No. 1: Yes. Think about it. If your first tier is a It’s almost 9:30 Referring back to Figure 7.1, I will narrate a description of the ‘‘Why?’’ you might ask. ‘‘You can only intra-day trade if the price must drop to hitprice it. levels Therefore, (the right-column you’re numbers only in Figure monitoring 7.2). your In this example entire illustrated setup. drops? fusion-trade LNKD because I’ve$3 found of that the 173.72 it’s first-tier swing beenprice price trading level. levels I’ve within and gathered I all my havewhiteboard prior them on in my front wall. of I’ma me, locked trade—but looming and only large loaded if across and the the ready price to drops. execute so important that I’mfor reference. displaying them again here in a feature box after the bell rings, 146 INTRODUCTION TO FUSION TRADING ne yscn nr nti e rd eu.Btti iethe time this But setup. trade new to this prepare on I profit and entry 15-cent trade), second my (intra-day my delete entry enter to 174.91 decision the the on make order target I swing So my for 173.72. right of heading it’s price and instead, drop to continues It profit. a execute I’ll 175.41). does, price past it support cents as 175.41 174.91(50 soon the As for hit. waiting to simply level I’m it point, because this At entry, drop. next my 173.72. of of level $3 price swing within the is be to too, happens it, Yes, level? new price a reenter to looking sidelines levels. the price on lower at back trade I’m now and over, is rfi nti nr-a eu.Tepieplsbc n iuelater minute one back pulls price The my 15-cent for setup. standard the intra-day take this I on example this profit In option. either choose can I the my level. plus 177.00 it, the of of $3 $3 within within is is 175.41 level for of swing entry Rules second Golden the the because traded apply the I my do. that as to confirm traded need and I all trading is intra-day execution entry so at, order enter to the levels price of my and plan a have I plummeting. netepieht 7.0 ne sn ate re xcto to execution bell. order the fastkey using 176.50 enter at I buy/long 177.00, hits price the Once ihn$ fasiglvl h rc oscniu nta direction, to that get in continue I does today. whenever price doing are it’s the as level, chances just swing But a day. of $3 that within stocks other trade I’d levels support right-column down. the way trading the be on I’ll so drop, does price the u hspriua nr-a rd os’ ulbc o 15-cent a for back pull doesn’t trade intra-day particular this But to continues price the exit, trade last my after minutes six About this trade I Can 175.41. is level price support intra-day next My o l aet oi atfrte170 rc ee obreak to level price 177.00 the for wait is do to have I all Now htaotmy about What ohr ego! we here So be would simply there Then instead?’’ up shot it if ‘‘What initial 5cn rfi $5potwt 0 shares) 100 with profit ($15 profit 15-cent ie n hnetrtetaea exactly at trade the enter then and time, first nr.As codn oteRls 7.0cnbe can 177.00 Rules, the to according Also entry. Ding-ding-ding! xtstrategy? exit h re lsvr ucl,wti iue after minutes within quickly, very fills order The . htpotd take, I do profit What h akti pnadtepieis price the and open is market The 7.0spotlevel support 177.00 buy/long h rd o 177.00 for trade The . 5cnso $2.00? or cents 15 ii re for order limit 0cnspast cents 50 otrade no a be can . . INTRODUCTION TO FUSION TRADING 147 sell plus $1.00 . I execute a . It hits the 173.72 profit. I say $200 173.82 + fusion trade . My exit price target is 175.82. It didn’t matter whether that 100 shares was a with an average price of P.M. . 200 shares at a $2.00 profit 200 shares 173.72. A couple of minutes later, the price hits 172.72. I now I would regain the small loss over the next day, or days, when That’s a great question. For now, I’ll give the most basic answer. In You might ask: ‘‘What if the price never reverses before the market This trade is about to become a Keep in mind that this example reversed on the first-tier swing You need to get comfortable with being in the red. I would sell my swing position at a $200 loss or a profit. Youovernight. know that I couldn’t hold an intra-day position because I could accumulate moreday trades swing while levels still and in the place currentAlso, more swing, the thus intra- price more could potential have profits. gapped up overnight more than $2. the example I’ve shown here, Ia had swing 200 trade shares. and the One other ofentry was the an trades of intra-day was trade. 174.91 The was firsthit 100-share from my an $2 intra-day profit level. targetprofit on So, rule the if applies fusion the here trade price beforeshares as the didn’t well), at close I 3:59 (the would 50% have had to sell/close 100 close?’’ Whenever you’re countertrend trading, beingnormal. in If you the execute red your is swingland perfectly levels square properly, in then the you’ll green. always swing price level,past so I executehave another 100-share order at second entry will be(200 shares) a for swing a full entry, $2 profit. so I can hold the entire trade before the market closed. In many casesall the day, price will and run that’s much lower fine,to because enter you’ll at. Don’t always assume havethe the lower green trade swing will on tiers immediately the reverse samecommon back amateur day, to mistake. as it does in this example. That’s a very That price hits 15$400 profit minutes later and I exit the fusion trade with a order for 148 INTRODUCTION TO FUSION TRADING htsalyune oudrtn tti point. this profit. turn at $2 can understand full the to You for need fusion. them you ride all of and That’s market concept swing a the the into before setups on intra-day red, focus your the just in now, out For closed from closed. losses were recoup that to setups how you intra-day show They strategies. advanced other htwyn n oe oe,bteeyn ersteintra-day the risk. monetary learns zero at everyone and system, but trading platform. swing money, training the trading my loses to demo prior of one system a weeks no on three all way or only, two That trading first intra-day the to trading dedicate program intra-day I and place. somewhere, start the trading to fusion is have and/or you trading But swing future. exclusively the of in goal the with do, fusion I and swing I’m while levels intra-day the at watch trading.) but do profits, 15-cent I intra-day times for all looking not I’m setups. swing my when to red. days happens bad into on deep this out runs time wiped price to get the profits time small From those stop-loss. my of most to if everyone: close, but to instance, choice about is no For market have the reward. and I red intra-day less the for into much deep hard point runs so work setup this intra-day to net At incentive they $2. no of because have target setups, I profit career, on my trading way, make Either my trading. to in fusion going exclusively I’m I’m or I’m trade hit, whether to every levels, level swing swing a strong for around waiting built is make than I trade per $2.00 make you. rather would much So cents. would 15 I obvious. is reason anymore. I ■ never nPr ,Catr9 nrdc htIcall I what introduce I 9, Chapter 5, Part In fcus o att er o osigtae o l ftereasons the of all for trade, swing to how learn to want you course Of determine help to setups intra-day use always I know, you as (But trade Every trader. swing master a become I’ve is reason second A biggest The reasons. few a are There ask. might you not?’’ ‘‘Why nr-a ny wn ny rFusion? or Only, Swing Only, Intra-Day Options: Trading Your Deciding s nr-a rdn xlsvl o 5cn profits—not 15-cent for exclusively trading intra-day use io trading pivot and INTRODUCTION TO FUSION TRADING 149 With that said, I now address those who are itching to finish this book In Chapter 8, I offer several examples of swing setups and fusion The sky is the limit when you trade with this system. But I can’t Your comfort zone should totally jive with how well you know this You are not yet a master of this system. It takes weeks to learn this system. and jump right into swing trading without mastering intra-day first. setups. possibly know how to coachset. you In without this knowing book you I andwhat can your works only skill best. offer options and leave it to you to decide system. So should yourhave limited capital/buying capital, you power. may For only wantthe instance, to swing strongest if trade, swing and you only tiers trade On within the the other 5 hand,both percent if intra-day bubble and you’re (see swing highly Partand setups, capitalized with 3). then more and than you 100 have can shares mastered per go entry. right into fusion, So start with intra-daytrades setups while and practicing belose on happy money. with a Every 15 demo. single centsstarts If trainee on with who you your enters intra-day don’t, myyou’ve trading, you’re coaching mastered going and program the to only intra-daystock(s), on setups then it’s and harmless time are demos.the to in swing, start After rhythm then the you with swing canto your trading. work the Once on pinnacle. you the fusion. master You build your skill set CHAPTER 8

Sample Fusion Trade Setups

n this chapter I show three classic fusion trade setups that cover the Iframework of my method. In the following part you’ll view several advanced strategies that build upon what you learn here. Here you’ll 150 find two sample whiteboards, as charts. They are the standard for support or resistance fusion trading. I’ll be using this whiteboard format from this point on. Notice that the whiteboard chart in Figure 8.1 includes the prior price levels shown in Figure 8.2: pre-market and previous day. Because you’re now learning the full fusion system, the whiteboard will only include the daily levels that are currently swing levels. Also note that I only show the support or resistance levels. This is because on the morning of a possible fusion trade, your focus should be only on those levels. Why is this? Think about it. If a swing level is hitting, it can only be one of those. You will never have both a swing support level and swing resistance level hitting on the same day. The only time this could ever happen would be on earnings release dates, and you would not be trading until after the release, which would typically be the next day. Once you master this system you’ll know before the market opens whether you’re trading long or short on all your trades for any particular SAMPLE FUSION TRADE SETUPS 151 you’re seeking to fusion positions that day, and your short levels. short resistance you’re seeking to fusion trade, then you’ll long positions that day, and your whiteboard will only long Sample Whiteboard Chart: Resistance Levels Sample Whiteboard Chart: Support Levels levels. And if it’s a swing support Also note that you may have to switch the pre-market price level stock. If it’s a swing FIGURE 8.2 FIGURE 8.1 trade, then you’ll only be trading only be trading show whiteboard will only show withtheprevious-daypricelevel,dependingonwhichislower/higher.And as I show in the third examplethe here, first the tier pre-market levels swing take level, out so now you’re trading off pre-market levels. 152 SAMPLE FUSION TRADE SETUPS 6.0 lohdm rvosdyhg f130.I iue8.5 Figure In 163.00. of high previous-day my had also I 162.80. level column.) right price swing first-tier 149.42 the on could I down, resistance fusion day. to decide that to stock needed that I trade all was information This 163.31). past trading ($1 was price current The IUE8.3 FIGURE a had also I time 162.80. that and At 162.00 swing between trading was first-tier pre-market 2015, a 23, March of example setup. first entry swing this the shows in 8.3 IBM Figure setup. use trade I trade. the to which morning regarding illustrates levels decision early bell the 8.5 opening taken the in then Figure levels and pre-market, were intra-day during room. the All gathering trading of scenarios. process online more normal to trading my progressing from fusion then directly advanced and setup and simplest involved the with starting I’m ■ netebl aga :0 a ypre-market my had I 9:30, at rang bell the Once T nbeyut oeesl rs hs ’eol itdthe listed only I’ve this, grasp easily more to you enable (To h first The apeFso rd #1 Trade Fusion Sample ees eas h rc went price the because levels, indicator B n-iueChart One-Minute IBM not aetae it traded have okdfrwsthe was for looked I rtte wn eitnepielevel price resistance swing first-tier ihn$3 within long hc o a e nFgr 8.4, Figure in see can you which , ntutli came it until —not fthe of up r-aktHLprice H/L pre-market ftepiehdgone had price the If . wn entry swing high, ihn$ of $3 within t163.31. at hc was which f164.31 of .On SAMPLE FUSION TRADE SETUPS 153 Whiteboard Price Level on IBM (for 3/23/15 trading) Daily Chart Levels and Swing Levels FIGURE 8.5 FIGURE 8.4 154 SAMPLE FUSION TRADE SETUPS ne.Bttemi esn eeaet know to are here lessons you’d main before hit the to tier But second enter. the for waiting be would you beginner, eesad sIv rvosyisrce o od,Ihdte ready them had I do, intra-day to rang). my you bell all the instructed to knew when previously levels (I I’ve intra-day entry as no swing and, had first-tier levels I the because into easy leading fairly trade be particular to This order. going numerical was in levels setup my all had I that notice you’ll ees n tas hw hc ftediiswere dailies the of which shows also it and levels, aetig la n ipe ’ enwiigfrteetypieof my price placed entry I the did for it When waiting hit. been I’ve to I’d example, 164.31 one simple: this and In many clear level. how things price knowing system. made given is any this at trading buy/short day with to all experience shares of part own capital hardest own your the your and Remember: what and allows, yourself power about buying worry Just there. go even 8.3). part.) (Figure hardest trade the the entered the I is did, needed waiting it just Once I (The trigger. plan. hit. correct my were had levels to price I My it and prepping. and for homework the wait all done was I’d did I all whiteboard. my from levels other price each of those cents deleted 50 within levels two have cannot I nec nr.I te od,i hseapeyuwudhave would you example this shares in 100 words, other In entry. each on nr s and is, entry oei iue85ta u tiehog ieo ohtepre-market the both on line previous-day Also, strikethrough and a morning. put each I that whiteboard 8.5 own Figure in your note on levels these writing be xtd hsmastefis iri vr o ol aeprofited have would $100 or You trade, over. rule. block is profit 100-share tier a first with the $200 means this exited, then rule and profit 164.31 hits 162.31 price to the when of codnl,yucnseta iue84shows 8.4 Figure that see can you Accordingly, hnyur rtlann hssse,yul nytrade only you’ll system, this learning first you’re When Don’t it. Forget ask. might you trade?’’ you do shares many ‘‘How trade, to line in next was level price what exactly knew I that Now loke nmn htti sa is this that mind in keep Also )Ete a,i h wn irpot n o hudhave should you and profits tier swing the if way, Either .) O tmypot$1.00 profit may it (Or . tte143 rc level. price 164.31 the at when high h rd ylstruh o edt eptrack keep to need You through. cycles trade the rc ees h?Rmme h odnRule: Golden the Remember Why? levels. price first-tier + 6.1sigentry swing 164.31 ttecoercl the close—recall the at elshort sell nr.S elsial,a a as realistically, So entry. ercsbc ul$2.00 full a back retraces + .SointhiscaseIsimply order. swing ihte5 percent 50 the with where only ees o will You levels. the orfirst-tier your rc ee to level price daily 0 shares 100 shorted price 50% SAMPLE FUSION TRADE SETUPS 155 the current second tier hit 164.31. I immediately initially my swing overnight. Such moves . held IBM Five-Minute Chart Let’s finish this trade and move on. I entered short at 9:41 on March Are you a little bit lost at this point? I understand. It will take more Now look at Figure 8.6, a five-minute map of a three-day period. You might not have entered at all, and that’s fine, but you still would 23, 2015. That was when thethrew price a cover/buy order for mythe $2 price profit at never 162.31. hit, I so waited all then day, I examples and real-worldDuring application my before training program, this thisAnd is makes you’re certainly just any one reading, of not sense. the driving—just tough looking parts. at the map. The next day, the priceSo never I hit my held target fordropped of another early a in $2 night. the profit Finally, morning. at$2 My on 162.31. exit profit. March price The hit first-tier 25, and swing 2015, I level exited the of with 164.31 price my was now over, and the are perfectly normal, especiallyto for my this other, particular more stock.slow volatile Compared mover. stocks, like TSLA and LNKD, IBM is a have needed to recognizealways exactly be when on the top tradedone, of and ended. your when the price You second levels, must tier becomesonce and the the also first 164.31 tier. when swing In level the other retraced words, first for tier a profit, is at 165.59 became the new first tier FIGURE 8.6 156 SAMPLE FUSION TRADE SETUPS h eodte f143 n h hr iro 7.2i iue8.7. Figure in 177.22 you of if tier but third the you, between and gap to 184.32 huge lot of the note tier a instance, second like For the much. sound not may it’s TSLA, gap know exactly three-dollar it’s case A this tier—in off. second the $3 to close so is tier first the when 6.9bcm h e wn ee sbcuei ee i t thus up. it, back went hit price never the when/if it trade because to level is next level the why it swing reason making The new tier). the second became previous (the 165.59 165.59 was tier first new IUE8.7 FIGURE you stock, the using platforms price charting the most back-test to on able here be used should levels you Depending this, stock. reading volatile you’re most my when TSLA, on used I 2015, 27, March On ■ eas SAmvss at lasrcmedta ihthat with that recommend always I fast, so moves TSLA Because apeFso rd #2 Trade Fusion Sample onttyafso rd f h rttier first the off trade fusion a try not do al hr eesadSigLevels—TSLA Swing and Levels Chart Daily htsepcal true especially That’s . al chart daily . SAMPLE FUSION TRADE SETUPS 157 the not second tier second tier . I’m boxing entry price second tier swing price level intra-day newly formed levels two that could have been made on this this price level at 189.11. If I wanted below minimum Again, you will always start with 100 shares on each entry, so bear Also note that on this particular day the first tier swing of 187.32 I resolved the situation by using In Figure 8.7, note the price levels I had to work with at the opening Figure 8.8 is my whiteboard. It shows my price levels organized in swing level. Your fusion entries must be within $3 of your swing entry price, In this case my second-tierentry swing was price level $1 waslooking past 184.32. for My that newly swing level, formed so intra-day it levels was that 183.32. were within Therefore $3 I of was in mind that $600 is the (new lows of the day)swing as entry. my This fusion setup would entries become leadingday. two into The separate my first trades, all trade in wouldthe one actual be swing a level would $400 be profit the($2 standard and pullback swing on the trading 100 $200 second shares). profit trade Thethis off end one total fusion would trade be setup. a $600 profit on actually missed, meaning it camepulled within back 25 cents for ofanyway. $2. I entry, finally and started So fusion then trading the off the first tier could not have been traded This means the firstThis tier is was where most really of risky myrule by for trainees fusion struggle, starting trading or off a a they first flat-out fusion tier, break and trade. find this themselves in deep water. of 184.32. bell on 3/27/2015. I had my current swing supports, the numerical descending order. Notice thatsupport I crossed because off it the was pre-market moreof than 183.32, $3 and off the mybecause second previous the market tier day opened swing high entry of 189.70 couldn’t be traded setup. Eventually, whencapital, you you master can enter this more and system make more. and have enough being 184.32. to fusion trade into my swing,intraday I lows would that need were to within wait $3 for newly of formed my swing that up big and clear: 158 SAMPLE FUSION TRADE SETUPS ee a oigt xta 2pot oInee 8.5t hit, to 187.45 needed I so profit, price $2 185.45 a the at off exit entry to first hoping my was after I words, level other future. In the in more). do or will showing you I’m what example and trade, this fusion in I But when cents. do 15 I the what take you system, just actual this to the learning you first and/or want you’re I formed when that low know intra-day You hit. new a entry waited a swing have recognized could until you simply sidelines Then the have trade. on the could exited you then and level, profit 15-cent intra-day 185.45 the at trade. fusion 100-share first my entered I to translates This 183.32. 8.8 FIGURE nr rc a h 8.0itadylwa 9:57 at low intra-day 185.70 the was price entry 186.32. below nr-a ee.Oc h rc rpe o154 t10:17 at that past 185.45 cents to 25 dropped be price would the entry fusion Once first level. my intra-day So 8.9. Figure in atdfrtefl 2poto l nre o ol ls t50% at close would I (or entries all on profit $2 full the for waited I entered you Once options. two had have would you point, this At nMrh2,21,m rtspotfre ihn$ fm swing my of $3 within formed support first my 2015, 27, March On Whiteboard n el formed newly any nr-a o rc tor at price low intra-day A.M. sindicated as , A.M., SAMPLE FUSION TRADE SETUPS 159 As soon 200-share setup, or I would enter fusion ., I took my $400 profit. After that, the A.M it hit my swing. This is always a great trade! at 11:00 TSLA One-Minute Chart on my current . I entered my swing trade at the 183.32 price. At this before P.M in play. So I waited for the second tier swing to hit next. It took all day for the second-tier swing entry of 183.32 to hit. Now I had 200 shares off two intra-day levels. At that point my It turns out that the stock reversed for my $2 pullback on the first Note that the entries are at least 50 cents apart (remember the Not long after my first entry, a newly formed intra-day low was $2 pullback as it hit 186.80 At 2:39 price began to drop againstill toward my original swing level—that was average price on my 200-share positiona was 184.80. I was looking for 200 shares, Golden Rule). And in$1.00 most apart, cases especially I withis like a a my highly perfect volatile intra-day exampledifferently, stock entries according of like to to how its TSLA. be speed each This and stock volatility. needs to be traded slightly my third trade off the swing at 183.32. created at the 184.40 price level (theSo 10:17 I candlestick in decided Figure 8.9). toI make was my going second to entry enter at off 184.15. this. This Once happened at it 10:27. hit initially, and—it didn’t. So I wentto to trade plan and/or B, a which swing was entry to to wait hit. for a new low FIGURE 8.9 160 SAMPLE FUSION TRADE SETUPS nee ysigtaea 8.2 h iebig2:39 being time the 183.32, at trade swing my entered I $2. to full my reverse get the to to before just price final-hour reversed position, my the actually 100-share during price needed rang, The my bell profit. I on $2 swing. full profit a a for $2 185.32 become a now for had looking which still was I point ihn$ ftefis irsigwso ac 4 05 u ttook it 167.03. but of 2015, level 24, entry dropped the March price hit on to swing was the day swing the next day the tier on until first first focus the The We’ll of 168.03. $3 FDX. within of use first-tier I level example support trade fusion this In ■ oaan o’ sueta o a uintaeofafis iron tier first a off trade fusion master. to can training you of that stocks. weeks all assume takes don’t This wait again, tier. to need third So you or others with second stocks and the tier, Some first for trading. the fusion off trade begin fusion to can you levels levels, swing correct your the knowing choosing about all and red It’s the green. in the a deep into every dipping back become on reverses be and to never prepared confidence, you’ll be have trade and rollercoaster, single levels this your in handle Believe can’t pro-trader. you If reversing. out. before 177.22 to way the all dropped have could price the normal,butkeepinmindthatthethirdtierwas177.22.Inotherwords, price y3:09 By fpemre o wn nr smr dacdadrqie more you: requires for up and it advanced box more I’ll is so swing entry precaution, swing your a adjust for to pre-market need of you you, to entry happens this When trading. ihih h urn wn upr levels. support swing current the highlight wn irt i.O o rd f h r-aktHLfryu wn entry. swing your the for for H/L pre-market wait the should off you trade you pre-market, Or in hit. hits to tier price swing entry swing your If o okcoeya iue89 atclrytehg drop huge the particularly 8.9, Figure at closely look Now ntergtclm ieo iue81 hwthe show I 8.10 Figure of side right-column the On ecm osigtrading! swing to Welcome nti xml h swing the example this In uinTrade Advanced Fusion An #3: Trade Fusion Sample rc orflc h r-aktlwpie rigt rd off trade to Trying price. low pre-market the reflect to price rpe lot$0 nterdbfr tple back pulled it before red the in $200 almost dropped P.M. h rc a rpe l h a ont 8.1 othe So 181.41. to down way the all dropped had price the , o edatiksi ord hs trades these ride to skin thick a need You nr rc f167.03 of price entry o nywsthis was only Not . i npre-market in hit before al levels daily h trade the next P.M after that . SAMPLE FUSION TRADE SETUPS 161 . entry of 169.16 on March 25, 2015, previous day low the pre-market low price didn’t pull back 50 cents past had to be Daily Levels first swing entry My In Figure 8.11, I crossed off the previous-day level of 169.16. I also of 166.95, making it 166.45. It crossed off the 168.03 first-tierthe swing first level, tier but swing thatto had does adjust not cycled my mean through. entryexample It of to was how be intra-day still levels off valid, can the dictate but your pre-market I swing low. price had This is a perfect was because thepre-market. first-tier So swing your first of entrycase, 168.03 or should you be had would off wait already pre-market until second-tier low broken swing in support in this hits. I chose to trade the pre-marketswing low level before to waiting for hit. the Notehigher second that tier than the opening the price pre-market onand this it low. day only This was means much happens thattrading. The the from reason stock why time I had couldn’t to a trade lot the time, of volatility in pre-market FIGURE 8.10 162 SAMPLE FUSION TRADE SETUPS epi idta a ihn$ fm etswing next my of $3 164.20. within was was low I pre-market that mind My in 165.35. Keep of low previous-day my o y$ rfi,nrddi ls bv 0preto yprofit. my of percent 50 above close it did nor I So profit, $2 my for 8.11 FIGURE attepemre o f142,mkn t137.Inwhad now I 163.70. it profit. $2.00 making 164.20, cents 50 of shares trade 200 low block decided 100-share pre-market I second the Therefore my 163.57. past entered of I trade. level fusion swing to second-tier the off was more. even dropped it Instead up. to would looking go swing was not first-tier I did the Now price then the happen, but to done, were be that If profit. $2 my the reflect 168.03). to of swing price swing first-tier entry my again, swing So entry past. my cents 50 was adjusted which low, simply pre-market I so market, ac 6 2015, 26, March ontcnuetaigtepemre nr-a ee sa nr-a trade. intra-day an as level intra-day pre-market the trading confuse not Do h etdyIwsloigfrtepiet ulbc o184 for 168.45 to back pull to price the for looking was I day next The pre- in hit it but swing, first-tier the trading was I Remember, h rtfco edt on u sta h tc rc on price stock the that is out point to need I levels. factor price first whiteboard 3/26/2015 The the logged I 8.12 Figure In held rc a o 6.5 n o 6.3(1ps h first-tier the past ($1 167.03 not and 166.45, now was price vrih.Ti a n eas twsasigtrade. swing a was it because fine was This overnight. ihthe with htbadFX3/25/15 Whiteboard—FDX opened average uintaeit h eodte upr f163.57 of support tier second the into trade fusion t142.S meitl hce off checked immediately I So 164.28. at f150.Inee 6.8t i o my for hit to 167.08 needed I 165.08. of entry ,which . SAMPLE FUSION TRADE SETUPS 163 an intra-day pivot trading, that level overnight. So I needed could not hold Whiteboard—FDX 3/26/15 over the weekend. hold (pre-market low). I Keep in mind that my second entry was a fusion trade off an Again, this is totally normal. You have a plan and you’re in control Now that I was out of the intra-day trade, I was still holding That was fusion trading at its best. I was able to make marginalized On March 26, 2015, the price never hit the average of 167.08, but level FIGURE 8.12 of your strategy. You can gonext and week. enjoy your weekend; you will profit my original 100-share swingday, trade on from March the 27, 166.45That 2015, level. meant a The no Friday, next fusion the tradesMonday, price March and went 30, no totally 2015, exit. sideways. to Iwas make a would any have new to decisions. wait For until now this advanced strategy. The fusion tradeto setup what in that’s Figure all 8.13 about. is a prelude profits from an intra-day tradeto while make in me a money. swing In position Chapter that 9 had yet of Part 5, I cover it did close attrade 165.49. of That 100 meant sharesI for I recognized a could a profit. $179 sell profit. I my entered intra-day at fusion 163.70, so at the close to sell 100 shares atI the would close, be if forced I tomy was stop-loss swing in on the trade. that green, Either 100-share or, way, intra-dayentry if I of portion in 166.45 was of the until keeping it red, my profited first $2. 100-share swing 164 SAMPLE FUSION TRADE SETUPS IUE8.14 FIGURE 8.13 FIGURE ac 5 2015. 25, March chart. each easier in is activity lasted it trading trade that of day so The entire charts FDX. the candlestick see on to five-minute trade used I swing days. fusion several entire this for setups iue81 eet h rgnlsigetyta okpaeon place took that entry swing original the reflects 8.13 Figure trade intra-day actual the show 8.14 and 8.13 Figures in charts The ac 5 05 rgnlSigEntry Swing Original 2015, 25, March ac 6 05 uinTaeSetup Trade Fusion 2015, 26, March SAMPLE FUSION TRADE SETUPS 165 . and close out my intra-day 100-share portion of the P.M You need to make sure your current broker has your account set so In Part 5 on advanced trading techniques I will show you what to do Figure 8.15 reflects the non-activity trading session on March 27, So my plan was twofold: simply hold intra-day for my $2 profit, or Also notice in Figure 8.14 that the high of the day hit roughly one Figure 8.14 reflects the fusion trade setup that took place on Note: that if you are trading thethe same account stock is with multiple set 100-sharewill to entries/exits, always ‘‘cost basis,’’ close meaning out theway the most you potion recent exiting that can trade isordinal recognize in swing the your position green intra-daytraining and for fusion program. not days. the profits This red. while is This holding certainly your an area covered in my if the 100-share fusion trade wasunderstand in that the red you at are theand still close. can For in intra-day now, a fusion just trade swing while with holding the that position. original 100 shares 200-share swing trade with either atrade small or loss on a the small 100-shareprofit fusion profit the on $179 the on this 100-share particularoriginal fusion day. position And trade. overnight. I I held happened the swing to 100-share 2015 (Friday). Notrade trades position over were the weekend placed. (for you, I that held would be the a 100-share original swing wait till 3:39 full dollar higher thanlook the at closing the chart price in wherethe hindsight I 166.50 and price ask exited. why level. It’s I Ifby easy didn’t you asking sell to were when you: to it ask How wasYou me could at did not that, have you I possibly predicted know wouldis that. respond that What my I was own can indeed steadfast going predict $2 consistency. to profit For be as instance, the I always.never high? was Again, hit. waiting I So for needed I my kept thewith. holding price Either till to way the hit I close. profited.stick That 167.08, to was The your and plan—stick my key it to plan lesson the system. to herelow-volatile This begin just is day happened to that so be you the a very needconcerned price with to never is hit not holding my my $2 intra-day profit fusion position target. overnight. All I am March 26, 2015. This fusionbell trade rang. happened within seconds after the 166 SAMPLE FUSION TRADE SETUPS IUE8.16 FIGURE second- the swing for second-tier waiting The was break. I to but 163.57 bit, tier a drop does price The position). 8.15 FIGURE Mna) edteoiia 0-hr wn oiinoe the over position swing 100-share original the held I (Monday). trade. no day—again, the in late that retracing not stock nti a,s otae n,n uintaecudb aebecause 2 made past be well could broke trade day fusion the no of And, low trade. the no so day, this on iue81 eet h o-ciiydyo ac 0 2015 30, March on day non-activity the reflects 8.16 Figure ac 7 05 o-ciiyTaigSession Trading Non-Activity 2015, 27, March ac 0 05 o-ciiyDay Non-Activity 2015, 30, March P.M .,andIdidn’twanttoriskthe entry f125 ee hit never 162.57 of SAMPLE FUSION TRADE SETUPS 167 of trading, then I trading sessions since we entered five within the first two hours This particular setup has been Keep in mind, if you get hyper-focused on your single position, You as a beginner may only be trading this FDX trade exclusively, This would be a good time to remind you that I am certainly trading Tuesday (March 31, 2015) was another sideways day. There were At this point I will be looking to exit anything over 50 percent If the price had reversed you will most likelyemotions get to emotional force you and to restless.are stray Do from fusion not this system. allow trades Furthermore,showed your there to you. So be remaineach made morning. vigilant! in Get this your whiteboard FDX price swing-hold, levels as I just but that doesn’t mean youstocks can’t be for watching and the papercurrent experience trading (FDX) other while swing trade. waiting on your profits from this other stocks while in thismy holding whiteboard pattern levels on each FDX. morning Iare am on in gathering my my online all other trading 8 room. to 10 stocks that no opportunities to fusion trade. So I held again overnight. of my profit. Orgives I me will $1.00 exit on byalready a recognized reentering $179 200-share another on average fusion this fusion overallfusion trade trade trade. trade. that setup Recall, We with my will I previous Wednesday see have (April what 1, 2015), happens or the later. next trading session on would have fusion traded the intra-dayfusion low trade. of I the held day. It swing didn’t, position so overnight no again. original first-tier swingnormal. on Sometimes a March swing 25, will pulltimes 2015. back it within runs Again, minutes, to and this the some- uncommonly fourth is sideways tier in and totally the market, takes so allsideways, FDX day; is and in also therefore trading this our relatively case swing exit it’s is been not hitting right away. weekend. The price startsthe to bells head rings. up, Recall,swing in trade. I Also, my there needed direction, was 168.45 nothe right fusion price to after intra-day was trade hit simply heading because so upat all 164.98. I day could and exit never broke the the low of the day 168 SAMPLE FUSION TRADE SETUPS IUE8.17 FIGURE yaeaepieo yoiia 0-hr wn oiinadthe and So position 164.49. swing was 100-share price original entry my my off on so entry price past, average intra-day cents my 50 fusion I shares, my first levels. 100 of price my with cents low made previous-day 50 164.99 within I the was So it low. because 3/31/2015). (on previous-day pre-market 164.99 the low was pre-market eliminated low The previous-day I 2.3). my chart and in 165.45 (noted was trade fusion my was have Here to tier first the for 168.03 least at Therefore, to through. entry). back cycled fusion pull my to (not need price 167.03 a the was holding entry if standard the target So you tier profit But days. first of three the than percent that more 50 for trade take swing will first-tier typically I target). long. of (50% trading profit full $1 six taking took up trade ended swing I conclude. This to trade. sessions swing the exited I when mi yonsse.Ti ilpot u anttl o xcl which exactly you tell profit. cannot my I for but back profit, pull will will swing This the system. day own my in am I Note: a bet xto pi ,21,bcueIfso rddit. traded fusion I because 2015, 1, April on exit to able was I so taking was trade this because previously, mentioned 2015, As 2, Why? April on place took that setup the reflects 8.17 Figure aebe ouetn hstaei eltm—htshwconfident how time—that’s real in trade this documenting been have I pi ,21,AtrEiigSigTrade Swing Exiting After 2015, 1, April sntover not is eal h rtte wn a 168.03. was swing first-tier the Recall, . entered yfso trade fusion my utb aware be must SAMPLE FUSION TRADE SETUPS 169 . + side . P.M P.M and . After 2 . If your next P.M pivot trading the actual swing entry to hit . advice is not a rule that applies across the board, and . But first you need to completely understand how fusion P.M Final Words on Fusion Trading . on April 1, 2015. I exited the trade with a net $200 profit. This 2 In Part 5 you can expect to see more fusion trades. In addition I will To recap, the fusion of a trade is essentially used in two scenarios: I was only looking for $1.00 profit. The price hits 166.47 at 1:49 swing level doesn’t hit, then no trades should be made after 2 you should simply wait for be showing more advanced strategies such as when your swing entry hits innew pre-market swing and entry you price, have and/or to when adjustyour the your next current swing price entry is price—you withinthe $3 then Golden of begin Rules. intra-day trading using I certainly do notbeginners follow to this the advice system,new myself. because stock. This you rule are is not meant in for rhythm with your line trading trading works. 164.49] / 2). You will most likelythe only first enter two your hours intra-dayit of fusion would the setups be market during wise due to to not try high to volatility. fusion Therefore, trade after 2 ■ P.M current 100-share fusion position is 200 shares at 165.47 ([166.45

PART V

ADVANCED RULES AND PROCEDURES

CHAPTER 9

Maximizing Net Profits and Minimizing Losses on Overall Trade Setups

173

hen it comes to explaining on paper, this chapter is by far Wthe most difficult. Not being able to describe it in real time on interactive charts created a huge challenge for my editor, and is frustrating for me as a coach. As I worked on this book I found myself doubtful about including the most advanced strategies. I thought that perhaps I should only reveal them one-on-one to those under my direct training, and not fling them out here capriciously. In the end I decided to add them, regardless of my misgivings. I figured some readers might desire the option to try advanced methods on their own. If they floundered and lost money or otherwise needed guidance, they would know where to find me. But just as I’ve often mentioned—and it’s even truer in this chapter—I’m afraid of what can happen if you try something tough with real capital and no formal training. At the risk of driving you 174 MAXIMIZING NET PROFITS AND MINIMIZING LOSSES l hi oeta,adId itterlso rcdrsfreach. rules for clear some procedures have on and logic rules the the memorize. digesting to list start can do you I way That and potential, their dense all that own. your over on helicopter jump to. the that right do of can every out You have you alone. you push not terrain, choice to it a going not That’s learn I’m error. can But and you trial Sure, them by program. doing alone training by all one-year adequately my learned in be repeatedly only can strategies, advanced their lose and situations all in mimic process. board will the the in training across shirts lacking it novices apply paper, and that setup on learned that example I’ve one Because show Why? I chapter. if this in find you’ll strategies o xtd ealfo at3ta orswing your that 3 Part from Recall exited. you trqie ud h nw h eri.A esnddrco in director seasoned a As to terrain. decided the I knows trading, day who guide a requires It yourself. terrain by unknown all it the in down when you’re and true convoluted more especially and road denser That’s the gets and same. the map the seeing the and not only Trading, you’re are Fusion here my of that map reiterate the I’ll framework, nagging, my with nuts ue n taeista epyurcpuetoelse.Yulearn You losses. those recapture you to help how that strategies advanced you and show red—because I rules tandem the In in rules. trade management a risk stringent exit my to of you tell I stop-loss—where to you hsmasta orntrsl a vnulybcm re trade. green a become loss. eventually previous can your result toward net allocated your even that be means an can This profits at trade new swing and Those same trade, profits. the back the on gain reenter ultimately typically always and target, level, can profit price you its better hits means tiers This all $2. of at average the and/or tier first eventually trade overall your have to profit. net is a point become The days. few a within ok n your and work, Warning: oofrtefaeoko l ope atc oyucnsee can you so tactics complex all of framework the offer do I my especially and strategies, My good. own your for it’s Sorry; dacmn naypoeso ae omldrcinadcoaching. and direction formal takes profession any in Advancement h otpreteape r pcfi iutosweeIinstruct I where situations specific are examples perfect most The Overall anbc h ossyuincur you losses the back gain fyudntapyterlspoel,ti ytmwill system this properly, rules the apply don’t you If eest h atta wn rd s’ vrjs because just over isn’t trade swing a that fact the to refers e profits net omit ilb diminished. be will h hr eusta ol lutaethe illustrate would that setups chart the ntevr ettaigssinor session trading next very the in ty nplay in stays not ni the until always MAXIMIZING NET PROFITS AND MINIMIZING LOSSES 175 + until the next wait . the trade. The advanced strategies —especially if you had to stop-loss. I like wrestling , by reentering at better price levels. net profit strategy-exit What Is Pivot Trading? Pivot trading Sideline trading Trading earnings release Once you’ve learned the following rules and you’re applying them I may have lost you at this point—my apologies. For now just Now I’ll define the advanced strategies. They are: Now you may want to know: ‘‘How do I stop-loss but still gain a That’s enough about losses. These advanced rules are not just to Just because you had to take a loss, that doesn’t mean the trade is over. consistently, only then will youOf be course, closer on to paper masteryof it the of sounds map this easy. as system. opposed I totrade can the to jungle. assure become You you really a it’s have to not. work Think for your remember this: to refer to this process as in this chapter are thewrestle a best losing tools trade I back into know, the to green date, that will help you and not just $2 max. net profit on the entire tradeto setup?’’ The advanced read rules about you’re going areprevent designed you to from save losingyou your in on the butt one sidelines. They’ll in devastating also help swing twoafter you you recapture trade ways. small by losses, They’ll soon keeping help you when you’re inyou the increase red; your profits. in For certainboth instance, situations, trade when they from you’re can the learning sidelines help how andgain to trade knowledge during of earnings how season, to you’ll not trade limiting in yourself to 200-share 100. block Also, trades you’ll or allow higher, profits to run for $4 This is a term I came upit’s with used to at describe the the process market ofor close. stop-loss an The when intra-day trade fusion. can The be action either of a the straight pivot swing is to ■ ■ ■ ■ 176 MAXIMIZING NET PROFITS AND MINIMIZING LOSSES fe h eodte.O ab ’lcos ofso rd nintra-day an trade trade fusion the to reenter choose I’ll level I’ll maybe GS Or trading tier. second when the But after tier. third a on reentering be everything. procedures, must is and stocks timing rules all and these that applying when is differently most before, to slightly you The treated more told paper. I’ve on much as reading there’s factor, you’re complicated you, what usually than warning strategy trade will I’m swing advanced amount any this But with That trade. like before. just fusion $2, day and/or capture the you’ll enough Typically far of it. run loss exceed to trade the new recapture the on to profit your allow price you better execution, a at stock that reenter yesterday. to closed is you when pivot than the of object The day. tc htyur rdn.Hr npprIofradangerously a your minimize offer to I just paper trading, on pivot confusion. Here to framework trading. oversimplified you’re that stock .Yuetrofafis-irsig u you but swing, first-tier a off enter You 1. three know beware! yet So don’t you. they do Because neither and Why? swing trade, entry. second-tier pivot first the to how their for one to wait is prior to This hit, beginners hit. to tell has always level swing I a why after reason trade original the entered least wn,there swing, hssrtg a nyb sdi eti situations. certain in used be only can strategy This o ntne hntaigTL a hoet io rd by trade pivot to choose may I TSLA trading when instance, For that After strategy. fusion-trade the use you reenter, you When o ntne ftetaeis trade the if instance, For hs r l pin htcnol edtrie ytespecific the by determined be only can that options all are Those neyuv atrdti ytm o huduepvttaigin trading pivot use should you system, this mastered you’ve Once eneigofete h aepieyucoe to h second the or at closed you choose price you same tier—and the either off reentering wn oht oyuso-oso orfis-irsigetya the at second-tier entry swing a first-tier for your on waiting stop-loss 4 you been So have hit. to should swing really you because rmr situations: primary past P.M. h rttier. first the ls.Nx a,yupvtt eatr orsalls by loss small your recapture to pivot you day, Next close. can’t eapvttae nohrwrs o uthv at have must you words, other In trade. pivot a be hcee shigher is whichever not nacret(rtte rhigher) or (first-tier current a in . o’ hold don’t tovernight, it MAXIMIZING NET PROFITS AND MINIMIZING LOSSES 177 . earnings . In other can be tricky, . higher than your stop-loss exit price for the profit. The profit is , and you’re in the red on still in play . But they’re mostly small losses you follow the fusion trading rules close with however many shares were P.M. no longer in play not until you wait for the swing tier entry . haven’t yet cycled through trade—move on. You can’t win them all! It happens overall trades were net loses Strategy for Entering Pivot Trades . Remember that when your trade’s still in play that means . You reenter the trade the next day, or if the release is in final overall Basic release pre-market, later in the day. being traded off thewith intra-day the same levels. amount The ofat shares next the as stop-loss, day but with you the fusion reenter intra-day trade words, on the nextsame day levels again. you don’t try to fusion trade the exact so you stop-loss at the 4 In order to get your reentry, You can only reenter if the tradeYou is can only reenter if your reentry price is price the previous day Remember these general pivot trading rules: Those rules imply that if you can’t reenter, that means your stop- If your trade is over, ‘‘Why not?’’ you may anxiously ask. I rarely lose on an overall trade The Luckily the pivot tradefusion process trade is strategies. exactly The only the differenceback same is the that as you’re losses my trying of swing to get and the previous day. So your not to mention theyou loss to may make have more mistakes. made you too emotional, causing 3. You stop-loss your swing positions on the day of an ■ ■ ■ 2. You’ve been fusion trading and your intra-day entries didn’t profit, your swing levels loss is either $2, or the 50 percentyour rule. You swing absolutely levels have to are—always. knowdisaster, where and If that’s not, something your I can pivot promise. trading will be a because I failed to recapture the next-day profits on the same trade your and they don’t happen often. to everyone. Imeaning certainly the log stop-loss trades throughout the year, 178 MAXIMIZING NET PROFITS AND MINIMIZING LOSSES tl npa.Tesm a etu o o.I o e ob odat good lose be won’t that stop-loss to you is a get remember stop-loss, require to you a thing If after The you. green either. for to overall, true back be trade can your same wrestling The play. in still o’ ne— at atfrtepiet oeee ute in further even move to price the initial the for for wait I wait favor. I my wait. enter—I don’t I the for waiting tier. first the than lower or higher is price rules the fusion the follow you entry, rd hni’ attesadr nta nr on() n o enter you and a point(s), enter levels entry to initial optimum standard waiting at the You’re You’re past hovering. it’s suggests. you’re when wording and trade the path, beaten what the much off pretty is trading Sideline ■ h an fhat u fyuv endigeeyhn ih,you’ll right, everything doing it. been to you’ve resort to if need But seldom heart. of faint the guesswork no There’s is book. rules system. strategy this this defined in need with Advanced clearly down still on set you. based already they warned procedures it’s time, and that I a note it. But at get involved. guy extremely to chart one setups them on trade showing focusing several I’m time, real when in Even setups this attention. At undivided yet? conferences lost phone my one-on-one you on with Are even ask: are, always to trainees want my I point, and at, looked already you’ve will profits the and now maintain for and motive procedures your follow. certainly that and Make rules focus. the vigilant follow a to you for important esr.I at3 sIitoueyut wn rdn,Idrc you direct I trading, swing to you introduce I as 3, Part In measure. ra xml fsdlnn swe rd si lyadI’m and play in is trade a when is sidelining of example great A io rdn s’ ay tgt rtyul n cr.I’ o for not It’s scary. and ugly pretty gets It easy. isn’t trading Pivot rules of ton the to rules additional has that chapter this over look I more much it’s novice a as but motive, main the are profits Net hti lsi ieietae u o’lrcl hti’ loasafety a also it’s that recall you’ll But trade. sideline classic a is That ieieTrading Sideline entry. . first-tier fado when if/and/or second-tier nr rc otigr n hni does it when and trigger, to price entry o a’ iebc nsml because simply in back dive can’t You . hytigr And trigger. they wn ee otigrta’ my trigger—that’s to level swing oto ortae won’t trades your of most o vr sideline every for MAXIMIZING NET PROFITS AND MINIMIZING LOSSES 179 sideline kind of trading, higher . Instead I entered at the optimum fourth- . Once you’ve mastered this system, you can start + I had no average price You can’t enter if the trade is noYou longer can’t a reenter swing at trade (not the in same play). level twice in one day. When you enter aswing and/or sideline fusion trade, rules. you must follow the standard Here are some sideline rules: This strategy of course has its downside. The obvious benefit is Right now I’m introducing you to a Think about it this way. If I were to enter a first-tier swing trade So it seems that you, the beginner, will be using a very advanced you’re much better positioned tosooner enter than you the would trade in initially, aaltogether. and first-tier If entry. profit the But price you can reverses misstier for the a swing trade profit level, just then after yourreverse the before hit sideline they of trade hit a the is first- second- over.may and be Most third-tier safe entries. swing So, on trades yes, the you sidelines, but no cigar! tier price level. Thattier hits. sounds great but it only works if the fourth ■ ■ ■ with 100 shares, and thenhave the triggered price more ran swing againstsecond me, entries. tier my So with trade let’s another would finally say 100, a I the fourth tier third reentered with tierwith off 100. with the an That another translates average 100, towaited price. a and for 400-share With position the sideline fourth400 trading tier shares. This I to is hit couldthat a and have perfect entered scenario, simply the especially when swing you trade consider with tactic as you learn hownot to so trade. fast—nothing’s It advanced, seems not likeonly if a 100 you pretty shares. enter Yes, big the I irony. firsthigher, do But but trade tell safety with you first: to 100 enter shares, a period. trade at a second tier or with 200 shares onyour the capital first permits. entry, or 300, or even 500—whatever to sideline. I warn thatand trading that a you first should wait tier forthe is the trade. very price risky to for run beginners, further before you enter which means 100 180 MAXIMIZING NET PROFITS AND MINIMIZING LOSSES ■ ■ rfis o ilra bu hsi hpe 0 ytaigroom trading my 10, Chapter larger in much this producing about thus read entry, and will per trades) You shares (sideline profits. levels 100 lower than or many more reality higher in with at But entered tier. first were the them with swing of start The all ‘‘minimum.’’ that as trades profits shows my room shows why on room light sheds trading also swing It works. online trading sideline how for feel a trade. you the on ($700) profit $7 juicy 217.00 a is earn price you means target which profit tier trade can fourth you swing Therefore and profit). the third, ($2 second, means first, That the your 215.00. of simple know is average as the you ( it’s but entry If point; 210.00, fourth-tier exit your this. at suppose your you instance, is For tell that that. then can as learned exit, I profit what’s But swing than map. current more. knowhow much this more even reading much sometimes from and requires profit, this $4 course a Of for back price the trade run the sideline can in You babe less. a or shares. are shares 50 or 100 however, 25 with with You, those stick make shirt. you to my how so know woods, lose I so not pro, and a I’m decisions can. it—it against percent 5 Right $8 tier. jumps fourth price a stock off the trading gates, the currently of is out stock the so bell, opening rt o,tebgne,ms ne ihol 0 hrs neigat Entering does shares. 100 tier only safety fourth with answer: the enter the must know beginner, you the You, yourself, first. For 400? or 200, with—100, still is tier fourth the words, as other long in so fourth, stock, a the sideline-trade and in come sueyuta tsntta ay u yeapeaoede give does above example my But easy. that not it’s that you assure I can you tier, fourth a capture do you If news. good the Here’s the at move huge the missed I’ve much. very like I scenario a Here’s eei h aet o aysae oIiiilz h trade the initialize I do shares many How caveat: the is Here o utawy aeeog aia eann oretragain reenter to trade. remaining sideline initial capital your enough after have you always because must simply You tier. position lower your or higher to a shares at enter more add can’t You not urne httepiewill price the that guarantee tl nplay in still technically . u h rc akt 217.00, to back price the run + hnti apn,Ican I happens, this When . long not u another run oiin is position) MAXIMIZING NET PROFITS AND MINIMIZING LOSSES 181 .to .; this A.M A.M 32 earnings EST). Previously hours (5 . to 9:29 A.M P.M. 8 not trade the day before or .to8 pre-market P.M hours (4 . If you don’t have a system to weather rules and procedures for trading on those basic . And so will you when in my one-year program. aftermarket . EST) or A.M Earnings Release Trading Typically there’s an average of eight stocks in my trading room at In my first book I flat-out tell you to Four times a year—that’s every three months—earnings results are Here I address the Regardless, I’ve developed a plan—a methodical system of trading is partially true. Most high or low prices do hit during that hour and 9:29 I’ve mentioned that the pre-market session is any given time. That means I experience on average about announced by each publicly tradedI company. have to So switch every gears and three revup months up the earlier engines. with That translates larger towhiteboard getting cups price of levels, and coffee much and more. quadruple-checking all my release periods each year I’ve been doing thishands-down the a most complicated long periods time to trade and in. I can tell you that those are dates. Earnings postings get released in I assume that most ofSo I’m you not already going know to whatremind waste an paper you earnings or that your release earnings time is. releaseto to be dates explain on are it. high But the alert and I timesor ready will when to else apply stay you additional away need rules and and do procedures, nothing at all. ■ chapter. For now, bear inmore options. mind that sideline trading certainly offers on those treacherous earnings release dates.shelter—my I novice certainly days do are not far runto behind for be me and made! there are huge profits the day of anthis earnings storm release in, youchaotic should and utterly hightail unpredictable. ita As for break. a shelter. novice, you These should periods just are take 182 MAXIMIZING NET PROFITS AND MINIMIZING LOSSES hmjs ieteothers: the like just them af nerig ees ae,hwvr o edt e the see to need you however, dates, session release earnings On half. a oei h rd t4 at trade the exit to just profit, partial released. a are with results exit earning or the stop-loss, applies: before to Rule prepared Golden be this to position, need swing you a holding approaches. day you’re big if the as Besides, develop to start typically that gaps overnight date. However, the system. to you close this that are, not mastered you overnight, you’ve experienced up if how right matter only trade no fusion but still release, can You the trade. to the reenter and/or enter to is position date swing release earnings the If #1 Procedure earnings during profits of do! amount I normal season. your triple or double make onan fhr-andcs n eln ihngt fcl sweats cold of nights 3 with dealing and and cash hard-earned of mountains share. I to want But I improve. advice drastically free more will much results have trading your rules, invaluable rkr.Btjs eas you direct-access especially because you periods, just both But during trades brokers. place to you for onn npemre,te o xta h close the at exit you then pre-market, in morning uehssm igero,adi a apni ihrdirection either in happen can it and room, wiggle some has rule .D o ne positon a release. enter earnings not an Do into position 2. a hold Never 1. o annsrlaeIhv w ironclad two have I release earnings For o ntne ferig r eesdin released are earnings if instance, For huge risking you’re Because know. to want may you not?’’ ‘‘Why h olwn ue-ae rcdrswl aeyufo losing from you save two will those procedures rules-based follow following you The If here. right advising my stop could I u hr r lasstain hr hsfive-trading-session this where situations always are there But should rm5 from A.M .to4 . rd te tcsisedadwi ni fe earnings after until wait and instead stocks other Trade . A.M. A.M o9:29 to hvr.I o s h ue rpry o can you properly, rules the use you If shivers. . P.M. during nta day that on A.M epi idta otboesallow brokers most that mind in Keep . ihnfietaigssin,nvretra enter never sessions, trading five within h ees fteearnings. the of release the can fteerig ees stenext the is release earnings the If . rd hnde o enthat mean not does then trade aftermarket ee hold never odnRules Golden h a before day the hnyuneed you then , wn positions swing Remember . . entire MAXIMIZING NET PROFITS AND MINIMIZING LOSSES 183 which that hit put them high and and figures in. . skill level for the next trading very definable wait waiting highest and lowest prices which swing tier is hitting . for the turbulent trading to end— I mean you’re down for wait you’re involved with, and of course your You The hard part is learning what the heck those price levels mean, Just be aware that you shouldn’t enter a swing position, and you The easiest way to find these dates is on Yahoo Economic Reports. ‘‘Why?’’ you might ask. It’s about and what to do when the market reopens. If you haven’t considered low price. Recall my intra-daylevels trading in rules Part on 2. gathering It’s pre-market place just like in that. that You turmoil. log Thensession the to once high begin. and again low you that took When the day comessimple you price simply levels. All wait you on need is the the sidelines and log two Procedure #2 should never hold overnight, whendates. And approaching make the sure earnings you’re aware release of the dates at all times— Go there and search ‘‘earningsthe release dates to dates.’’ change. Then You be need towhen prepared periodically for check you’re for that, within especially fivechange, it’s trading almost sessions. always pushed Luckily, outdays if to later. the the next day date or does else to a few stock But this is whereI my need live written interactive instructions charts to get explain useless. this any At further. this point all on your whiteboard in this intensely volatile andknow high-volume what trading I’m period. talking I about.wire, think Within most you seconds of of a our releaseeither stocks hitting direction. fluctuate the I up take 100 to percentperiod. $20 of I the or suffer guesswork no more, out guessing and of at this do all—just crazy so the in (but wiggling iswith not some to stocks in be someonly done three situations trading it’s without sessions okay coaching). out, toto and not enter For enter with a a instance, other swing swing stocks within trade you 10 may trading want sessions of the date. the counting. You batten down the hatchesor and stay aftermarket, there. Pre-market no matter: each will reach a 184 MAXIMIZING NET PROFITS AND MINIMIZING LOSSES ettaigssin tsol odfroeday one for good is only price It’s high/low session. release trading next earnings the that aware Be #3 Procedure the a on knowing trade for you reason when day. morning, the normal every as data same pre-market the of next the importance It’s when opens. blind totally session trading you’re trading then lows, and highs those .Wihswing your Which to questions: 1. two them these compare yourself ask and then and levels levels, those swing Take trading. aftermarket that and true experience. decision, of the your lot know make a to don’t releases. takes seconds you have pre-market rings, only bell you of and the out high/low, until up bow right typically Because program Why? my in trainees great. is time morning that all early then. having are next and releases the most decisions Luckily, and entry happened night order release your the all make of If have to of. aware you day be then the least aftermarket, charts at in your on release—or them earnings Have after them. prices low and high care. don’t will I that true, and SEC, it’s the happen. trading by if never if discontinued working Even is stop only pre-market that. will and It aftermarket all works. system for my is time matters theory, What have conspiracy into a don’t taps that’s system I But know. My and to rings. Street us bell want Wall the don’t levels with they after price whatever and what do before know to still to traded trader something being I’m or are has why. average It me the out. ask wanting not that don’t figure Please to candlestick. trying each in not levels, .Wihsigspotte()ddtelwpieo aftermarket of price low the did tier(s) support swing Which 2. e’ sueyuhv annsrlaelvl htfre in formed that levels release earnings have you assume Let’s Even out. it sit to want may you then pre-market, in is release the If the down write you that critical It’s basics. the to back get let’s So does chart daily The break? break? resistance not eitratraktadpemre price pre-market and aftermarket register irs i the did tier(s) . high rc faftermarket of price odfrol the only for good MAXIMIZING NET PROFITS AND MINIMIZING LOSSES 185 and I’m P.M. to the earnings release: prior (the resistance levels), and I’m highs swing resistance is 211.40. Good thing enter the initial trade at, or what price can first-tier EST, and now I have my results. The high price P.M. . . I need to wait and see what happens in pre-market the next cannot stop It gets to be 8 Let’s assume the release has just occurred. It’s 4 To help paint a picture of how I trade during an earnings release, As I’m writing all this I’m shaking my head, but I’m not finding this Once you know the swing tiers that did or didn’t break, then you In this scenario my 207.25 211.40 tier 1 214.65 tier 2 222.50 tier 3 228.30 outside 5% 238.50 outside 5% Here are my swing (resistance) levels So what price do I enter at? Hold on—this is where it’s critical watching the price fluctuations. Ithat; don’t I’m really just have letting to it sitlog be here the visual high/low, and music. after do The the only close thing of I aftermarket. have to do is here is a mockalways trade releases setup. earnings I’m aftermarket. And using chancesthis BIDU. are it I when will like you read still BIDU befor because your priced it own between back-testing $100 on and the next $250, release so that you comes can up. use it funny. I’m aware that complex factorsto arise enter when I a make trade myyou based decision up. on an earnings release—factors that will trip you know what price you was $230 and the low price wasgeneral $205. direction The first the thing I price lookcase for moved is the in. what price Did shot itmy up swing go levels, and up particularly hit or the thepretty drop? sure $230 In the high. this 205 low So won’t now be my I’m focus, glued come morning. to to I didn’t enterearnings at release that high price of228.30 prior swing $230 level. to took earnings out release, all because three the tiers and also the 186 MAXIMIZING NET PROFITS AND MINIMIZING LOSSES onn,we tcudg ihrta 20 hn5 When $230. than higher go could it when morning, o h rc og atte230.00 wait to the have past also I go here. to done not price I’m the But for 230.00. the today’s off be trade will will That I 238.50? the about what But hit? to 230.00 high the pre-market for the wait trade I I do Do or at? 226.75 enter of I do level what Now 226.75. oe rud r-aktoesa 2.0 otepiedopda dropped price the 9:30 So By 225.50. overnight. bit at opens pre-market around, comes niiulsok n kle nti uintaigsse,t make your potential. to their with system, grasp to trading rhythm even fusion or in work this tactics deeply in advanced these be skilled and to stock, phone have individual scheduled you one-on-one our Again, in trade conferences. them 50 coaching least I’m at while require trading setups release earnings and trading, sideline the important how see current your to impact levels. they you how swing and trades need be, past will just levels several price I you release earnings show Here could earnings. I on charts, based real at looking were we or entry, rd ta xrml vrogtpielvl hsi h ’lrd it ride the I’ll entering why be is will This I level. hit, price down does back overbought it extremely If an simple. at that trade It’s entry. I’m no have that I price entry single one you? lose I Did question: hc n ftoewudyud?Awy owt h higher. the with go Always do? you would those of one Which eoem riescmltl nesadte,pvttrading, pivot them, understand completely trainees my Before if And demonstrate. could I hundreds of example one just was That fe tlzn l hs ue n rcdrs nlycm pwith up came finally I procedures, and rules these all utilizing After short 4 o $2 not $4, oiin ilb t$3.A sa,ti l esthe begs all this usual, As $232. at be will position, n ’lenter I’ll And . A.M ,Ihv yhg fpemre ogd It’s logged. pre-market of high my have I ., waiting 0 hrso more or shares 200 y$2.00 by oseht fi os’ hit, doesn’t it If hit. see to nt$.0.M first My $1.00). (not eodtier second . .Ifithits, A.M .EST PART VI

TRADING AND TRAINING WITH DAY TRADER JOSH

CHAPTER 10

My Trading Room and How It Works

would like to start by reminding you that if I enter at a certain price Ilevel with a certain amount of shares, that doesn’t mean you should be entering at that level or with that many shares. At this point I don’t 189 have to tell you why, but for the sake of risk management I’m telling you just the same, because being a nag about your not going broke is three-fifths of who I am. As a beginner in this system, you haven’t mastered it yet, and you may have less capital than I do. So you shouldn’t be trading a first-tier swing level and you should only be trading in 100-share blocks. In most other online trading rooms that offer you instruction, that’s not how it is. What you’ll find there is counterintuitive and risky to the point of insane. Most are bogus, or they don’t provide correct information. The operator/trader is offering only what works for him, with no clue what works for you. Many online trading rooms make their calls after the fact, meaning they reverse-engineer what happened in-market that day, and then they don’t post their trading results until after the closing bell. Of course, this makes them look really profitable. Does the word illegal come to mind here? Many online trading rooms are thinly disguised scams. At the very least they offer their trade setups not caring that their entry/exit levels may not be the right ones for you. 190 MY TRADING ROOM AND HOW IT WORKS n 02 n the and 10.2) and atr.I hscatrIicuesvrlsresoso t o will You it. my have of on I parts. screenshots working two several are you’re there include that while I notice Therefore wheels chapter methodology. training this In my your mastery. with is room levels trading price my the found I system. Because worthless a do up to hype how to you incentive no show absolutely and have profits I consistent something it. make of to suspicion there or I’m confusion bogus. your eliminates This altered. be trade, to stock. levels each setup. on trade each hit document to I level hit, swing levels next swing those the all Once show and my I trading of where I’m is images stocks Here see room. the my you’ll swing that the chapter denying of this portion no Setups’’ in is ‘‘Future there instance, way For my This works. show hitting. system to it is of this ahead do weeks level to way best exactly The levels reflected swing does. has room system its trading my From the present, transparency. what the for to aimed right I and room, beginnings trading my designed inherent first enemy. I are worst own there your activity are you trading that being all risk with biggest risks—the because relatively say I ombigsta ugieadmksti ride this makes and quagmire that bridges room IUE10.1 FIGURE yoln rdn omi h e om riigporm Why? program. training my to key the is room trading online My /resistance support exact and dates have levels price the When when doing, been have trainers other most what to Contrary ihta ad r o ed o oego es yoln trading online My news? good some for ready you are said, that With prior prior a rdrJs’ al hr Levels Chart Daily Josh’s Trader Day otedyte ilhti aycssIko the know I cases many hit—in will they day the to wn rdn room trading swing otepiehtig hr’ owyti ytmcan system this way no there’s hitting, price the to Fgrs10.3–10.6). (Figures al hr room chart daily relatively Fgrs10.1 (Figures aefryou. for safe FIGURE 10.2 Daily Chart Room 192 MY TRADING ROOM AND HOW IT WORKS rtcli st osatyudt hm ydiylvl omdoes room levels trade. daily I stock My every them. and each update for constantly that exactly to is it critical ■ ■ ■ 10.3 FIGURE tc Fgr 02.A o nwb o,ti omi h e to key the is room the this important how now, Recall by system. know entire you the As 10.2). (Figure stock aeacs oi o ulyear. full You’ll a calls. for conference it coaching to this one-on-one access and have my document focus, with your to sync be in time will be my room the will enter trading have to this choose not then you program, If do training trades). simply (fusion trade I intra-day there and single because every many, them list too don’t far just I are produce. trades swing normal the hit. to swing a made. for wait be you’re the can during if profits made that more chart then means shares, the This 100 Also, shares. than 100 more chart, is with the tier trading each examine that you notice when you’ll because system—minimum my with h wn-rdn omi oeivle.I includes: It involved. more is room swing-trading The h al hr omi nyseict h al eesfreach for levels daily the to specific only is room chart daily The uintrades, Fusion earned been have could that profits minimum the shows 10.6 Figure h iiu rfist ae(iue10.6) (Figure date to today profits levels minimum The hit to likely most stocks 10.5) and (Figure setups trade future 10.4) The (Figure completed been have that trades recent Most a rdrJs’ wn rdn Room Trading Swing Josh’s Trader Day os’ nld l h nr-a uintrades fusion intra-day the all include doesn’t o atrtrader master a for a osiuea uhpot as profits much as constitute can , al levels daily r n how and are htwere that FIGURE 10.4 Swing Trading Room—Most Recent Trades 194 MY TRADING ROOM AND HOW IT WORKS IUE10.6 FIGURE 10.5 FIGURE uueTaeSetups Trade Future iiu rfist Date to Profits Minimum CHAPTER 11

The Day Trader Josh Training Program

o many times I’ve been asked: ‘‘How do you trade full-time and Salso find the time to coach?’’ The simple answer is that I don’t do both at once, not during the first two hours of the market. The deeper 195 way to answer the question occurs to me in two versions, one short and one long. The short answer is I enjoy teaching others. I love to show others how to make consistent profits. Day trading stocks independently tends to be a solitary profession, and I’m not a loner. I enjoy interacting with my trainees, and also my graduates who become professional traders. I love being there when my trainees first realize this system actually works. That pleases me more than anything that I may achieve by myself. The long-story reason is that, someday, I plan to have my own private equity trading floor on or near Wall Street, or sunny San Diego, preferably both. In order to have highly seasoned traders on my floor, I need to sufficiently train them. I need to develop and thoroughly groom our future trading group. I’m currently in the process of a double evolution. I’m building my trainee/graduate base, and most importantly, I’m acquiring the skill set required in a master private equity day trading coach. 196 THE DAY TRADER JOSH TRAINING PROGRAM nytret v aso ntuto,adyu e oe omore four-month to entire comes an for fee for pay your fees you and registration semester. it: university instruction, about state of Think most days bad. than five so to be three wouldn’t only it money, less lot dollars, of thousands after of wolves. tune Then, the to the techniques. you to trading throw wallet they standard your few out gouged a they’ve you show they with accounts and your up how you set show to programs training prominent Most or teachings. job industry ‘‘real’’ a got you’ve if learn commitment. to fulltime rush other master any no to there’s year set full so one system, can have in the You progression I material. own way the your learning and That and schedule practicing speaking. your entirely for me are pace—right and right conferences the you phone just our always but one-on-one, room, the trading to access online have same graduates and trainees live-trading All one-on-one. syuv led eni hpes1truh5 o illearn will you 5, through 1 Chapters in seen both already you’ve As ■ a in it do really training of essential. corporate can’t is set most you One-on-one in skill find programs. and you’ll and days, what mechanics is measly which the few setting, classroom a learn just can’t in You trading days. day few a last only there. the be can do you important. whenever can system isn’t the you grasp up—consecutive thoroughly and to broken is day, goal and The every out spread trade weeks to six required not You’re EST. akthus atclrytefis w or rm93 o11:30 to 9:30 during from system hours Josh two Trader first the Day particularly the hours, practice market must you program. because one-year is the This throughout happens training core This weeks. ntecnrr,my contrary, the On a charged they If 3K–7K. is range tuition industry training The standard the away blows program mentorship my of length The is coaching my that know to you for important extremely It’s iia riigporm hretesm e rhge,btthey but higher, or fee same the charge programs training Similar rga Details Program nr-a n wn rdn.We obnd htsm Fusion my that’s combined, When trading. swing and intra-day nta oetraining core initial only a-e-rd niebrokerage, online pay-per-trade a ae a takes minimum fsix of A.M. THE DAY TRADER JOSH TRAINING PROGRAM 197 , your trades you place swing stock while you one before swing-trading strategy is based on making 15-cent profits ($15) at you must know intra-day setups you trade in 100-share blocks. you place orders directly from the Level 2 quote chart in . why why why intra-day strategy Learning Objectives Learn real time Learn Learn trades. When you progress to learning my Depending on your rate of progression, the intra-day trading phase My ■ ■ ■ ■ of the course takes upnot the rush first yourself. two Learning or the threehere. system weeks. The It’s thoroughly final important is to all threeand that or Fusion matters four Trading. weeks Theover are more the for advanced remaining learning strategies yearknowledge swing will of of trading be the both learned program.For strategies The instance, and key you to using couldYou my go both would three system use to days that is maximize time straight to with profits. focus no completely on swing Fusion entry. trades. learn intra-day trading, and allone stock of in your the trades program. willyou’ll Typically, be place when limited you’re between to trading one that onehours stock, and of five the roundtrip market.start trades After adding in you more stocks. master the More that first stocks phase, means two more you’ll trades. eventually will run for $1.50–$2.00capital, profits you ($150–$200). will Depending have onAs you your the learn to option carefully maneuver, of thewill trading greater lead risks to more you greater begin than rewards. to take 100 shares. specific pivot points. You will only be trading Trading system. You willthe start pertinent off rules learning and procedures, intra-daytrading, and trading then a and you’ll system all advance that tolearn requires swing how more to experience Fusion Trade andsetups. by skill. Finally, using you You both will will learn intra-day the andtrading, advanced swing sideline strategies, trading trading, including and pivot trading during an earnings release. 198 THE DAY TRADER JOSH TRAINING PROGRAM ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ nr-a n swing. and intra-day trade. 100-share trading). navne lentv orligo a on relying to alternative advanced an lwyuaway! you blow er vrahnrdrlsadpoeue htmk h system the make that procedures and consistently. rules work hundred trade. a swing over a Learn into trade intra-day an turn to how Learn what Learn homework trades: essential. swing is and intra-day your back-test to how Learn for room the use trading to Josh how Learn Trader Day the use to how Learn to how of Learn out and in orders—getting seconds. limit in real-time trades place to how Learn and support/resistance intra-day forming newly recognize to how Learn the using and candlesticks one-minute daily using analysis chart Learn with trade to how hours Learn combined). two trades first swing the and in (intra-day trades market roundtrip the 20 of over place to how Learn of mechanics the Learn trade. 100-share per (swing) $200 and Learn Learn er o oFso Trade. Fusion to how Learn previous adetc hr ( chart candlestick why why o nr-a rd tcspie $100–$250. priced stocks trade intra-day you o aecnitn rfisprtaeo 1 (intra-day) $15 of trade per profits consistent take you tiers support/resistance. tier r ett ne tfor at enter to best are noatae(sopsdt vrgn n:ti is this in): averaging to opposed (as trade a into Lightspeed fastkey real rc-ee strategy). price-level pay-per-share re xcto ciia o intra-day for (critical execution order eotaigpafr—hswill platform—this trading demo static swing rkr t4 et per cents 40 at brokers stop-loss. trades. both THE DAY TRADER JOSH TRAINING PROGRAM 199 ). trade setups the option of live trading platform. each month demo initial core training specific trade setups. two during the one-year program. access during the one-year program to my Day Trader Josh After you’ve learned the entire system, Free Trading Room. My personal guidanceearnings through seasons the four very risky and tricky Experiencing Day Trader Josh tradingphone in conferences). real time (one-on-one Training on a fastkey order execution Virtual in-person mentorship: back-testing your tradesone (one-on- phone conferences). asking me questions on Recap What the Price Includes After core training, my personal help with your After core training, continuous 5-to-15-minute phoneand conferences emails for an entire year. Learning the Daygraduating Trader to pro-trader Josh status within entire the one-year trading period. Eight methodology or more and one-hourand phone strategy conferences sessions with (one-on-one me training for the ■ ■ ■ ■ ■ ■ that you perform on your own. Contact me for scheduling start-dates. ■ You can learn myspread the Fusion sessions Trading over a systemmy longer wing period. all for Regardless, within you’ll an be six entirefor under one year. weeks, full You’ll year. or have access to my trading rooms ■ ■ ■ ■ ■ ABOUT THE COMPANION WEBSITE

his book has a companion website, which can be found at www T.wiley.com/go/daytrading. Enter the password: dipietro123 200 The companion website offers an opportunity to view and download full color versions of all the figures from the book. MY FINAL WORDS TO READERS: WARNINGS, REMINDERS, AND PROSPECTS FOR THE FUTURE

s you’ve seen, in this book there are over a hundred rules and Aprocedures. With that said, virtually every trade setup can go 201 horribly wrong if you neglect even one of the rules or don’t follow proper procedures. This is not only true for you. This is true for all Wall Street day traders and for traders at all private equity firms all around the world. In the professional world of day trading, you don’t just lose capital when you make a big mistake. You get fired. You take the proverbial walk of shame off the trading floor. In the interest of not losing your money, you need to approach my Fusion Trading system with exactly the same caution and prevention that the pros use to keep their jobs. I can’t tell you how many times I’ve been contacted by graduates who tell me the horror stories about their bad trades. They all have one thing in common. They all admit that they knowingly made a mistake. As a trainer my main objective is to coach you to the point where you can back-test your trades at any time and know exactly where you should have entered and exited, or whether you should have entered at all. After learning my system beside me, one-on-one, you should 202 MY FINAL WORDS TO READERS ilalb efcl otn.Wy Because upset Why? graduates content. very and perfectly be trainees be disciplined likely all my will will and you I scenario Meanwhile, hellish worried. hit and this and position most In short In level. your burned. against swing break $10 get the full to will the run continue you will eventually you price the that if cases, promise but can Okay, I exit. rule, you this and level. green, swing a goes of trade $3 within come your to the off price used the $10 have for now should wait You are to done? You Rule have Golden $210. you should at what is So level level. and swing price $200, swing at tier this position first without short the But, the enter system. you my suppose like information, the sounds given past that cents far 50 So position short level. a resistance enter you and high pre-market trade level. swing a approaching chances or day, hitting one either in it’s far because that it’s skyrocket are does it If session. trading single o ntne h otdtietlmsaeatae a aei to is make can trader off. a when drastically mistake trading be intra-day detrimental will start most trades the intra-day instance: your them, For of one any break intra-day with: begin always we what trading. with begin Let’s being memory. you’re and while time real in taught truly. be yours by only on coached here can understood rest be The can that paper. procedures and rules wing. important my most under still this you were tell you held if to you have me would need if certainly soon. really I especially you too stop-loss? did to mistake, in graduate, jumped a a As held you made overnight. never know position you also level know should daily should you the You then (meaning days), level 10 swing for a actually not real was in decisions proper the own, your trading. on while make, time to ability the have fyuinr h odnRl,yumyjs e uk n your and lucky get just may you Rule, Golden the ignore you If you Suppose chart. a for need no here, words in you show can I ilntls h odnRlsaan u ilsrs hti you if that stress will I but again, Rules Golden the list not will I psychology trading your into hardwired be must following The the of several to reference quick a with book this concluding I’m placed just you trade swing the that know you if instance, For ’lueTL sa xml.TL a aiyrn$10 run easily can TSLA example. an as TSLA use I’ll oeta 3oftersiglevel swing their off $3 than more before esatdintra-day started we . + none in MY FINAL WORDS TO READERS 203 is 10-day hold rule ) A.M. remember that all swing levels are daily starts at 6 always an intra-day position overnight. held You didn’t stick with 100 sharesuntil max you per mastered tier/intra-day the price system. level You You tried tomastered get the fusion more system. than aYou didn’t 15-cent have profit whiteboard price when levelsthe ready bell you and rang. organized hadn’t when You didn’t gather thesometimes correct pre-market pre-market high/low price (recall, You weren’t aware of the earnings release dateYou of entered your more stock. thaneach one other. intra-day position within 50 cents of You failed to findfirst-tier the swing level correct was. daily levels andYou know traded where a your second-tier first-tier swing level. swing level whenYou didn’t you gather thought the correct it previous-day high/low was price. a You didn’t wait for intra-daylevel. levels to come within $3 of a swing Now we’ll move on to swingFirst, trading. you must Here’s a list of factors that contribute to disastrous intra-day trades: So you see, because you threw one single rule out the window, levels, but not all dailythe levels key are to swing knowing levels. your The swing levels. ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ your trade went terriblywhile wrong, the rest your of trade usday, went trading or the we deep same never in entered system to the were begin profiting red, with that and very are safe on the sidelines. trading the shortcome position, within $3 we of the allWe swing level. chose started We looking to all for choseabove wait the the $207 correct newly (within for process. $3 formed the of intra-day the price highs $210 swing that to level). were 204 MY FINAL WORDS TO READERS ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ orsiglvl,ol hnwl o aetesilstt akea tackle to set skill the have determining you of will capable then trade. fusion are only and levels, setups swing intra-day your the grasp fully you eesals ffcosta otiuet iatossigtrades: swing disastrous to contribute that factors of list a Here’s eei ito atr htcnrbt odssru uintrades: fusion disastrous to contribute that factors of list a is Here After is. setup trade fusion a involved how just know you now By trading. fusion cover let’s Finally, eeswa o aet okfradto. forward look to have you what Here’s o hudb rfiigol 5cnso uintae,nttefull the not trained. trades, formally fusion are of you cents until 15 $2, only profiting be should You to prior positions intra-day your out close 4 to sure make don’t within You comes level price swing. your intra-day of your $3 when can trade attempted fusion be a requires, only trading intra-day as just that, forget You You level system. price the tier/swing master stock per you max until new shares 100 the with sticking of not You’re volatility and speed add. the you realizing not You’re recognizing not profits. and soon $1–$2 too full positions your swing tier. your swing exiting each are on You $1.50–$2.00 than more get to trying earnings You’re an of sessions trading five within release. trade swing a enter You trading pre-market in hit level session. swing your that realizing not back-testing. the You’re not watch, properly night—you’re and to morning skills every the chart lack daily you or watching, not You’re o r rigt uintaemr hnoesokprtrading per stock one than system. more the master trade you fusion before session, to trying are You P.M. hold aktclose. market , wn oiinoengtadit nerig release. earnings an into and overnight position swing a MY FINAL WORDS TO READERS 205 Welcome to day trading stocks the Wall Street way! But once you master this system, you can certainly anticipate the You will ponder whether you’ve learned enough from this book to upside of trading with$2 more profits than on 100 fusion shares trades.you’re per properly With tuned, tier. that with said, You all four the canmissing cylinders sky a syncing, take is and beat. you’re the not limit when try my fusion tradingmy on your coaching. own, Before or youdirection whether decide you you what take, should please to gonot remember with do, that months and this of no system trainingyou’re matter takes prior weeks which in to if going my live trainingmy with coaching, program, real you with money. will Even theyou’re need if one-on-one ready at to advantage least trade of six live,this weeks system. and of then another instruction year before before you master

INDEX

AAPL (Apple Inc.), 47, 116 real-time (current) intra-day Aftermarket: trading activity, 104–105 avoiding trading in, 15, 17, 183 in swing trading, 119–120 earnings releases, 21, 94–95, Baidu.com, Inc. (BIDU), 46, 114, 181–182 134–136, 185–186 207 previous day high/low, 58–59, Bankruptcy risk, 37 184–185 Bid/ask spread: Amateur traders: average daily volume and, 35 breaks and, 4, 10–11, 25 as critical for intra-day stocks, gambling mentality of, 23 47–48 impatience of, 8, 9 ideal level of, 35 Amazon.com, Inc. (AMZN), 47, on pre-market Level 2 charts, 97–100, 116 47–48 Apple Inc. (AAPL), 47, 116 Black-box (high-frequency) trading Average daily volume, 34–35 systems, 35, 62 Averaging down, 4, 14, 31–32 Body, of candlestick charts, 55, 56 avoiding reckless use of, 31–32 nature of, 31 Bollinger bands, 54, 60 tier-trading versus, 31–32 Breaking news, 5, 21, 37, 50, 95 Breaks, 10–11. See also Sideline Back-testing, 102–106 trading end-of-day intra-day trading activities during, 11 activity, 105–106 in controlling fear factor, 4 information needed for, due to news and economic 102–104 reports, 28 208 INDEX aia/agnrto 21,18, 12–14, ratio, Capital/margin Capital: charts: Candlestick 146 orders, limit Buy/long power: Buying Budgeting: ras ( Breaks, nsigtaig 3 14, 13, trading, swing in 14, 12–13, trading, intra-day in 39, 19, calls, calls/margin equity 12 defined, 56 55, wick, support/resistance sustainable 87–88, 54–56, one-minute, 89, 74–77, rule, five-candlestick 110 104, 62–64, daily, 56 55, body, 102–106 back-testing, in 14, 13, traders, swing of 18, 12–14, management, risk in 14, 12–13, traders, intra-day of 12 defined, 18–19 11, of, importance 32 trade, every for 11 breaks, during 5 focus, maintaining in 27 consistency, maintaining in 25 10–11, 4, of, importance 121 133–134 130, 125, 121–122, 39 19, 121 70–76 levels, 159 152, 102–106, 91–92, 110 133–134 130, 125, 121–122, 121 39 19, Continued ) Confidence. Commissions: 5 focus, maintaining in Coffee, Coaching. 30 Channel, News Business CNBC Close. ossec,26–27 Consistency, onetedtrading Countertrend overconfidence 6 of, 7 importance 6, for, trading (paper) demo trading pro-trader typical 16 trading, swing for 38–42 16, pay-per-trade, 86 38–42, 16, pay-per-share, fpotlvl nsigtrading, swing in levels profit of intra-day in levels profit of 26, traded, stocks in price of 7 and, overconfidence 34–35 liquidity, of system trading regimented highly 4 factor, greed controlling in 27 maintaining, in breaks 34–35 volume, daily average of ftaig 35 trading, of 27 sizes, trade of criterion stock-selection in ofr ihbigi h red, the in being with comfort oue 40 volume, positions Overnight close; 91–92 86–88, 48–50, 27, trading, 45–48 33–34, 26–27 for, 48–50. 35, 22, 9, 7, methodology, 45–48 33–34, 26, system, 129 126, 122–123, 117–118, 48–50, 147–148 trading Swing trading; Intra-day trading; See femre;Market Aftermarket; See e also See Training/coaching e also See versus, erfactor Fear Fusion 6–7 INDEX 209 Earnings Earnings See also See Intra-day trading See demo, 105–106 trading sessions, 182–183 earnings release, 184–186 economic reports 21, 94–95, 181 66–67 50 providers: 96–106, 199 structure, 16, 41–42 release trading; News and trading, 144–148, 152–169 releases; News and economic reports earnings release date within five general trading rules, 181–182 nature of, 181 trading session following training/coaching for, 186 avoiding holding positions into, avoiding trading on, 16, 181 history and consistency, 46–47 overnight gap of more than $10, stop-loss orders day of release, Yahoo Finance in monitoring, 29 day of earnings release, 183–184 in fusion trading, 149 Lightspeed in placing orders, 97–100 FASTKEY order execution, 41, pay-per-share commission during breaks, 11 in confidence-building, 6, 7 in controlling impatience, 9 Economic news. Earnings release trading, 181–186 Direct market access (DMA) Earnings releases. Day trading. Demo (paper) trading: Emotional attachment, 34 Entry/exit strategy in fusion Daily Daily See also See also 124–126 109–113 tier, 128–136 level, 112–113, 115, 118, 132, 144, 152–154 157–158 68–74 trading, 62–77 within $3 of first entry, 80–81, 84, 94, 152, price levels in intra-day trading; Daily price levels in swing trading trading; Daily price levels in swing trading 127–130 price levels in intra-day rules for determining, 110–113 10-day hold rule, 111–112, 124 resistance, 110–111, 118, avoiding trading every swing determining first-tier swing whiteboard logs, 68–74 prior price levels and, 57–60, rules for determining, 62–67 logging and organizing, 67–74 minimum of one daily price level in swing trading, 110 on whiteboard logs, 68–74 in daily chart, 62–63 on whiteboard logs, 68–74 in daily chart, 63 in swing trading, 110 countertrend reversal in, 53–54 retracing in, 48–49, 154 stop-loss orders in, 51–52, 94 Daily price levels in swing trading, Daily price levels in intra-day Daily low, 59–60. Daily high, 59–60. CRM (Salesforce.com, Inc.), 125, 210 INDEX nr/xtsrtg npivot in strategy Entry/exit intra-day in strategy Entry/exit ATE re xcto,41, execution, order FASTKEY strategy. Exit 5 focus, maintaining in Exercise, 39, 19, calls, calls/margin Equity swing in strategy Entry/exit oncinwt intra-day with connection 91–92 90, exit, of rule 90–91 entry, of rule 20–22 predetermined, 6 and, overconfidence 49–50, barriers, price market 4 factor, fear controlling in setups, swing with connection eltm rds(aullimit (manual trades real-time charts, quote streaming 2 Level 96–97 keys, keyboard 102–106 trades, back-testing 116–118 exit, of rule 115–116, entry, of rule taking for rule percent 50 res,100–102 orders), 97–100 199 96–106, with 121 118–120 168 129, 117–118, profits, trading) Intra-day ( 142–144 140, 120, setups, 152–169 124–136, 115–122, trading, 177–178 trading, 89–90 trading) Swing trading; Fusion ( 142–144 140, 120, 88–95 trading, e also see ‘nr/xtstrategy’’ ‘‘Entry/exit e nre beginning entries See uintrading; Fusion e also see uintaig 137–169 trading, Fusion 102–105 FreeStockCharts.com, Focus: 89, 74–77, rule, Five-candlestick trading, swing in rule percent 5 level: price swing First-tier 54 lines, Fibonacci (FDX), Corporation FedEx factor: Fear eiigtaigoptions, trading deciding 59 high/low, daily 204 mistakes, common 4–5 maintaining, for tips 4 of, importance 115, 112–113, trading, swing in 152 trading, fusion in trading, swing in rule percent 5 51, 10, 3–4, controlling, for tips 3–4 of, nature 6–7 and, confidence 10 and, breaks str,139–140 term, as session, trading non-activity level price daily one of minimum with trades intra-day merging training/coaching, of importance 144–148, strategy, entry/exit 110 129 126–127, 124, 122, 113–117, 152–154 144, 132, 118, 129 126–127, 124, 122, 113–117, 160–169 147–148 93–94, 165–167 84 80–81, entry, first of $3 within 110 109, trades, swing 201–205 196–197, 152–169 148–149 INDEX 211 See also Consistency) gambling, 13, see versus 48–50, 86–88, 91–92 96–106 14, 19, 39 86–88, 91–92 148–149 Fusion trading; Swing trading 54 78–79, 86–88 47, 114–115, 119, 176 57–58 152–156 23–25, 88 consistent profits and, 27, day trading breaks and, 4, 5, 10–11,capital/buying 25, power, 27 12–13, common mistakes, 203 consistency in ( consistent profits, 27, 48–50, daily price levels, 62–77 deciding trading options, entry/exit setups, 88–95 FASTKEY order execution, 41, of amateur traders, 8, 9 intra-day trading, 8–9 swing trading, 107 tips for controlling, 9 approach to trading, 40 back-testing, 102–106 basic procedure, 26–27, 45–52, nature of, 3–4 tips for controlling, 3–4, 10, impatience and, 8–9 Impatience, 8–9 Intra-day trading, 43–106. GS (Goldman Sachs Group Inc.), High/low pre-market levels, Hours of trading, 19, 77, 169 IBM, 46, 48, 49–50, 130–134, 13, 23–25, 88 intra-day trade, versus, versus each other, 83–84 47, 114–115, 119, 176 entering first trade, 79–80 trade setup, 81–82, 84–86 within $3 of first entry, 80–81, 84, 94 support/resistance level, 84, 159 high/low or prior level, 83 49–50, 89–90 31–32 196–197 level 162–169 being on alert for, 49 breaks and, 10 summary, 79, 145 swing trading, 144–148 no two entries within 50 cents of maximum of three tiers for each minimum of one daily price level know second entry before initial entry off intra-day in controlling greed factor, 4 entry/exit strategy, 88–95 entry price 25 or 50 cents past in confidence-building, 7 nature of, 13 reckless averaging down as, day trading trading pre-market intra-day timing of trades, 169 Trader Josh Training Program, Greed factor: Goldman Sachs Group Inc. (GS), Government regulation, 36–37 General Motors (GM), 30 Golden Rules, 78–95 Gap rule, for daily level,General 66–67 market price barriers, Gambling: 212 INDEX ee ut charts: quote 2 Level 62 60, 54, indicators, Leading 62 Lag, nr-a rdn,( trading, Intra-day wn trading swing support/resistance sustainable 20–22, stop-loss, strategy system, criterion stock-selection 35–36, 33–34, price, stock hardware screen level price prior predicting in levels price one-minute in action price capital SEC minimum swing trying before learning 8–9 in, impatience ( Rules Golden 5cn aktbrir,49–50, barriers, market 25-cent Program, Training Josh Trader 81–82, setups, three-tier gambling ietacs res 97–100 orders, direct-access pre-market in spread bid/ask ees 70–76 levels, 174–175 92–95, 50–52, 45–48 33–37, 9, 7, 45–48 104–105 54, recommendation, 56–60 levels, support/resistance 60–62 reversals, 102–106 91–92, 87–88, 54–56, candlesticks, 39 19, 14, 12–13, requirements, 140–142 107, trading, aa 47–48 data, 89–90 196–197 112 84–86, versus, versus, see 3 32,88 23–25, 13, Continued odnRules) Golden 139–142 ) iudt,aeaediyvolume daily average Liquidity, 29, (LNKD), Corp. LinkedIn orders: Limit Lightspeed Leverage: aktmkr (MMs): makers Market close. Market positions: Margin 60 54, charts, stock MACD tnad 101 standard, 24 price, predetermining execution, order FASTKEY in 48–50 27, profits, consistent for 146 buy/long, orders, stop-loss trading swing requirements, capital intra-day 39, 19, calls, calls/margin equity 18, 12–14, ratio, capital/margin 12 as, power buying margin holding avoiding 40–41 trades, block 100-share vrg al ouead 34–35 and, volume daily average 163, 94, 21, trading, 169 pivot 77, 19, trading, of hours 39, 19, calls, calls/equity margin 13, overnight, holding avoiding n,34–35 and, 155 143–147, 81, 71, 70, 69, 64–65, 60–62, 100–102 21 39 19, 14, 12–13, 121 121 121 32, 24, 17, 13, overnight, positions 175–178 positions Overnight 121 121 32, 24, 17, eo 105–106 demo, e also See Aftermarket; INDEX 213 15 versus, Market versus See 117–118, 140–141 breaks, 11 196 open 15–17 84–86, 112 54–56, 87–88, 91–92, 102–106, 152, 159 96–106, 199 pay-per-trade commissions, 16, 38–42, 86 market risk, 16 selection system, 33–34, 35–36, 45–48 pay-per-share trading, 39 gap rule for daily level,intra-day, 66–67 32, 94 margin, 13, 17, 24, 32,swing 121 trading, 109–110, buying power, 121–122 defined, 39 pattern identification during potential scams, 38–39, 78, 189, dangers of, 6 indicators of, 6–7 causes of, 15 normal exposure tips for avoiding, 16–17 three-tier max strategy, 81–82, FASTKEY order execution, 41, pay-per-share to prevent overexposure to stock price in intra-day stock Overnight positions: Pattern day trading: Opening bell. Overconfidence, 6–7 Overexposure to market risk, One-minute candlestick charts, Online brokers: See Pre-market Whiteboard logs) See also Earnings releases see also 3–4 structure for, 16 21–22 24, 27, 40–41 21 also to, 16–17 134 89–90 data ( 98–100 for maintaining consistency, 27 pay-per-share commission in controlling fear and greed, advantages of, 40–41 for beginning traders, 13–14, tips for monitoring, 29–30, 37 types and impact on markets, impact on entry/exit strategies, at start of day, 30 avoiding trading on, 16, 181 breaking news, 5, 21, 37,breaks 50, related 95 to, 28 normal exposure to, 15 overexposure to, 15–17 tips for avoiding overexposure causes of overexposure to, 15 preparation for trading, 70–74 hours of trading, 19, 77,news 169 at open, 30 in FASTKEY order execution, 100-share-block trades: Newly forming price levels, 71–73 News and economic reports. Multi-tier swing trades, 127–130, Market trading hours, 19, 77,MSNBC, 169 21 Market risk, 15–17 Market price barriers, 49–50, Market open. 214 INDEX io rdn,2,9,163, 94, 21, trading, Pivot 5 issues, Personal/family commission Pay-per-trade commission Pay-per-share r-aktdata: Pre-market ro rc ees 56–60 levels, price Prior 58–59, high/low, day Previous riigcahn o,18 186 178, for, training/coaching 176–177 for, situations 175–176 of, nature 177–178 rules, trading general 177–178 strategy, entry/exit 42 trading, swing for 38–39 problems, potential 86 level, profit static 39 traders, day pattern for 40 brokers, finding 38–42 of, benefits and features rdn r-aktintra-day pre-market trading hits price entry level swing price, stock in factor rhythm 56–60 in, levels price prior spread, bid/ask chart 2 Level selection, stock in factor key as levels, pre-market high/low 151, 150, trading, fusion pre-market, in trading avoiding level 135–136 120, during, 141–142 47–48 48 120 68–74, 57–58, 162–169 17 175–178 38–42 16, structure, 38–42 16, structure, 68–74 162–169 versus nr-a trade, intra-day eitnelvl,56–60 levels, Resistance limit (manual trades Real-time Profit: naodn ekesaveraging reckless avoiding in execution, order FASTKEY in 104–105 back-testing, taking for rule percent 50 trading, swing in consistency trading, intra-day in consistency 68–74 logs, whiteboard on 144 trading, swing 56–60 levels, support 56–60 levels, resistance 58–59, high/low, day previous 57–58, high/low, pre-market 150 trading, fusion high/low daily nsigtaig 1–1,118, 110–111, trading, swing in 58–59 high, day previous 57–58 high, pre-market level, price swing first-tier 90–91 strategy, entry 57 defined, 59–60 high, daily intra-day, sustainable confirming 104–106 back-testing, in on 32 down, 100–102 orders): 168 129, 117–118, profits, 129 126, 122–123, 117–118, 91–92 86–88, 48–50, 27, 68–74 120 68–74, 68–74 59–60, (resistance/support), 124–126 152–154 144, 132, 118, 115, 112–113, 70–76 INDEX 215 Resistance Support levels) see see candlesticks, 54–56 87–88, 91–92, 102–106, 152, 159 60–62 levels) 141–142 50–52, 92–95, 174–175 50–52, 92–95 92–95, 174–175 down, 32 35–36 35–36, 45–48 7, 9, 33–37 price action in one-minute resistance levels ( one-minute candlesticks, 54–56, in predicting price reversals, rhythm factor in, 46–47, support levels ( in back-testing, 104–106 in intra-day trading, 20–22, pivot trading, 178 predetermining price, 24 strategy for using, 20–22, in avoiding reckless averaging bankruptcy risk, 37 consistency, 26, 33–34, 45–48 current news, 37 government regulation, 36–37 importance of, 33–34 key factors in, 33–34 stock price range, 33–34, as automatic, 20 to fix mistakes, 22, 50–51, 95 average daily volume, 34–35 average intra-day price swings, Strategy stop-loss, 20–22, 50–52, Stretching, in maintaining focus, 5 Support levels, 56–60 Stop-loss orders, 20–22 Stock-selection criterion system, capital in, Prior price Capital See gambling, 13, See versus versus See also 12–14, 18, 121 33–34, 45–48 criterion system, 33–34, 35–36, 45–48 levels 131–132, 150–151, 154, 155 54, 105–106 159–160 Stock-selection criterion system 50–52, 92–95, 174–175 127–130 23–25, 88 budgeting in, 11, 18–19 buying power countertrend, 53–54 price levels in predicting, 60–62 in tier-trading, 31 day trading in intra-day stock-selection consistency of stocks traded, 26, training/coaching for, 186 general trading rules, 179–180 nature of, 178–179 situations for, 180–181 market risk in, 15–17 nature of, 12–13 stop-loss orders in, 20–22, Risk management, 12–25 Rhythm factor, 46–47, 141–142 Retracing, 48–49, 154 Reversals: Start-up capital. Stock price. Sideline trading, 10, 178–181 Short swing trading, 129, Second-tier swing price level, 157, Selection of stocks. Screen hardware recommendation, Salesforce.com, Inc. (CRM), 125, 216 INDEX wn rdn,107–136. trading, Swing 80–81 pivots, Swing upr ees ( levels, Support rtte wn ee,112–113, level, swing first-tier 115–122, strategy, entry/exit options, trading deciding 109–113 levels, price daily 60 high/low, daily 48–50, profits, consistent 26–27 in, consistency 203–204 mistakes, common 16 structure, commission 14, 13, power, capital/buying 119–120 in, back-testing into positions holding avoiding margin holding avoiding 31 tier-trading, in 110–111, trading, swing in 58–59 low, day previous 57–58 low, pre-market 90–91 strategy, entry 57 defined, 59–60 low, daily intra-day, sustainable confirming odnRls 144–148 Rules, Golden 122, 113–117, rule, percent 5 2,1617 129 126–127, 124, 152–154 144, 132, 118, 115, 152–169 124–136, 148–149 129 126, 122–123, 117–118, 133–134 130, 125, 121–122, 181 94–95, 21, releases, earnings 13 overnight, trading Intra-day trading; Fusion 160–161 143–146, 70–76 Continued e also See ) Tier-trading. 21, (TSLA), Corp. Motors Tesla 124 111–112, rule, hold 10-day odnRls 78–88 Rules, Golden swing first-tier determining rdn xeine 121–122, experience, trading Program, Training Josh Trader 124 111–112, rule, hold 10-day 80–81 pivots, swing 110–111, levels, support 50–52 21, in, orders stop-loss 101 in, orders limit standard 131–132, 129, sales, short level, price swing second-tier 118, 110–111, levels, resistance commission pay-per-trade 109–110, positions, overnight 13–14 in, trades 100-share-block capital SEC minimum level price daily one of minimum before trading intra-day learning trading intra-day vrgn down averaging 3,14 152–154 144, 132, 118, 115, 112–113, level, 196–197 160–161 143–146, 155 154, 150–151, 159–160 157, 124–126 42 for, structure 140–141 117–118, 121–122 requirements, 157–158 152, 94, 84, 80–81, entry, first of $3 within 140–142 107, trying, ees upr levels Support levels; 202–203 176, 156–160, 114, 47, 30, 125 e also See versus, versus, Resistance 31–32 139–142 INDEX 217 161–163 55, 56 36–37 reports, 5, 21, 37 157–158, 167 196 85–86 recommendation, 54, 104–105 189–194, 196 195–199 13–14, 16 intra-day trading, 68–74 swing trading, 144, 154, from government regulation, from news and economic stock price and, 35 contents, 68–70 fusion trading, 150, 151, 153, practicing with intra-day setups, screen hardware for sideline trading, 186 Trader Josh Trading Room, Trader Josh Training Program, net profit as goal, 174–175 100-share-block trades in, 3–4, for pivot trading, 178, 186 potential scams, 38–39, 189, Wick, of candlestick charts, Yahoo Finance, 29 Volatility: Whiteboard logs: Transparency, 24, 190 See Demo (paper) trading 201–205 140–142 also 201–205 recommendation, 54, 104–105 195–199 189–194, 196 192–194 126–127 100-share block trade, 81–82, 84–86, 112 127–130, 134 for intra-day trading, 107, for fusion trading, 196–197, importance of, 32, 173–175, in controlling impatience, 9 for earnings release trading, 186 time required, 196 screen hardware learning objectives, 197–198 program details, 196–197 reasons for developing, 195 FASTKEY order execution, 199 inclusions in program, 199 swing-trading room, 190, daily chart room, 190, 191,fusion 192 trading, 192 red-zone tier in swing trading, three-tier max strategy with multi-tier swing trades, nature of, 31 Trading hours, 19, 77, 169 Training/coaching, 187–199. Trader Josh Training Program, Trader Josh Trading Room, WILEY END USER LICENSE AGREEMENT Go to www.wiley.com/go/eula to access Wiley’s ebook EULA.