10/20/01	05:16:26	<TT0__Ken>	welcome all, close to 700 registered for today, will be interesting to see how many show up :)
10/20/01	05:17:34	<TT0__Ken>	in the meantime, pls review these links if you haven't done so already:
10/20/01	05:17:36	<TT0__Ken>	http://www.daytrading-university.com/dtuliveroomstrategy.htm
10/20/01	05:17:43	<TT0__Ken>	http://www.daytrading-university.com/livetranscriptOct08_01.htm
10/20/01	05:17:50	<TT0__Ken>	http://www.Daytrading-University.com/freeseminar.htm
10/20/01	05:54:50	<TT0__Ken>	*** Good Morning Traders! Welcome to DTU's First-Ever Online Seminar Event ***
10/20/01	05:55:13	<TT0__Ken>	I wanted to start by saying *thanks* to all of you for showing up today, it will be a fast paced event
10/20/01	05:56:03	<TT0__Ken>	we have two guest speakers as well for later in the session, Alan Farley, author and publisher of hardrightedge.com , and Scott McVicker of tradecourse.com
10/20/01	05:56:21	<TT0__Ken>	I have much to cover today... I want to jump right into the details
10/20/01	05:56:42	<TT0__Ken>	if you haven't already, please be reviewing/scanning these pages during the first half hour or so:
10/20/01	05:56:49	<TT0__Ken>	http://www.Daytrading-University.com/freeseminar.htm
10/20/01	05:56:55	<TT0__Ken>	http://www.Daytrading-University.com/dtuliveroomstrategy.htm
10/20/01	05:57:00	<TT0__Ken>	http://www.daytrading-university.com/alerts.htm
10/20/01	05:57:05	<TT0__Ken>	http://www.Daytrading-University.com/livetranscriptOct08_01.htm
10/20/01	05:57:32	<TT0__Ken>	there is many detailed strategy tips in those pages, for a starter, and answer most of the faqs I get from folks worldwide
10/20/01	05:57:57	<_Susang>	Looking forward to today - Thanx Ken for doing this (DWD)
10/20/01	05:58:10	<TT0__Ken>	Today's Morning session will look at two primary areas: Daytrading Choppy Markets and Daytrading Breakout and Trending Market Days
10/20/01	05:58:39	<TT0__Ken>	a note, becuase of the number of folks we're expecting, eg 688 registered , I have disabled posting, so it stays focused in here..
10/20/01	05:59:01	<TT0__Ken>	feel free to email me your questions live and I'll answer within 20 mins here, at mailto:ken@daytrading-university.com
10/20/01	05:59:17	<TT0__Ken>	Ok enough for the intro, let's get to it
10/20/01	05:59:44	<TT0__Ken>	first points I'd like to make, to dispel some of the myths out there / common problems that I've gotten thousands of emails about over the last couple of years
10/20/01	06:00:45	<TT0__Ken>	first, since trading is a business, you absolutely have to have pro tools, eg a dat broker (I dont care who), a pro data feed (ditto, i use esignal, many use realtick) and at least 3-4 monitors and an over-128K connection
10/20/01	06:00:58	<TT0__Ken>	in other words, ""don't bring a butter knife to a gunfight""..
10/20/01	06:01:16	<TT0__Ken>	I am still amazed that people try to daytrade w/datek and aol on a 56k modem, don't even think about it
10/20/01	06:01:18	<TT0__Ken>	ok next topic
10/20/01	06:02:28	<TT0__Ken>	Trading successfully depends on two major factors: #1 Having all your market indicators and premarket/in market charts set up correctly and #2) being able to enter specific trades based on reacting to signals you're seeing
10/20/01	06:02:37	<TT0__Ken>	and we'll get into all the details, throughout today's seminar
10/20/01	06:03:00	<TT0__Ken>	many people are clueless when it comes to what indicators to use.. because there's so much conflicting information out there
10/20/01	06:03:18	<TT0__Ken>	example: I only use stochastics and candlestick patterns for trade Exit signals..
10/20/01	06:03:36	<TT0__Ken>	I use time & sales, sector charts, TRINQ, compq and chart pattern breakouts and bounces for Entries
10/20/01	06:04:02	<TT0__Ken>	separating out the signals, the application of ""when to use what signal, what indicator"" , is a challenge, that took me close to two years to figure out
10/20/01	06:04:20	<TT0__Ken>	I encourage all of you to experiment heavily, this is important
10/20/01	06:04:32	<TT0__Ken>	don't take anyone's word for anything in this business, be a skeptic
10/20/01	06:04:59	<TT0__Ken>	I am a longtime critic of the trader training/chat industry, because like my colleague barry rudd says, ""most of what's out there is bullshit""..
10/20/01	06:05:01	<TT0__Ken>	and I agree
10/20/01	06:05:11	<TT0__Ken>	so, I had to experiment , and so should you, Test everything..
10/20/01	06:05:17	<TT0__Ken>	using a core basket of trading stocks..
10/20/01	06:05:46	<TT0__Ken>	* Setting Up Your Charts for Daytrading - Technical Analysis Tips & Settings
10/20/01	06:05:58	<TT0__Ken>	see http://www.Daytrading-University.com/!!6mon.gif
10/20/01	06:06:11	<TT0__Ken>	this is my 6monitor pro trading rig, the latest setup I'm currently using
10/20/01	06:06:23	<TT0__Ken>	you will see, by scrolling over, all the different screens I use
10/20/01	06:06:48	<TT0__Ken>	a full screen each dedicated to semis, software, and a ""mixed bag"" screen of 1-minute thumbnail 1/2 day charts
10/20/01	06:07:10	<TT0__Ken>	also I have big closeup charts, a 2-day 2-minute candlestick chart, and a 1/2 day 1-minute candlestick chart
10/20/01	06:07:20	<TT0__Ken>	if I'm using stochs, I use 15/5 K/D
10/20/01	06:07:50	<TT0__Ken>	I also use the nasdaq trin..
10/20/01	06:08:04	<TT0__Ken>	see toni turner's book for a lot of details, well written, on using the trin..
10/20/01	06:08:25	<TT0__Ken>	It's an essential daytrading tool, to have the Nasdaq TRIN on a 1-min line chart
10/20/01	06:08:35	<TT0__Ken>	""what's the trin, ken?""
10/20/01	06:08:38	<TT0__Ken>	glad you all asked..
10/20/01	06:08:53	<TT0__Ken>	it's simply an index showing the ratio of the advancers/decliners line to buy/sell volume
10/20/01	06:09:23	<TT0__Ken>	briefly, it's an inverse indicator, 1 is equilibrium, less than 1 (especially say .8 and falling) is Bullish .. over 1.5 and rising is Bearish
10/20/01	06:09:28	<TT0__Ken>	and I look at this before every trade
10/20/01	06:09:51	<TT0__Ken>	to moderate things like, ""how loose are my stops on this?"", ""how many shares am I trading, eg trading heavy 800-1K or light, 200-500?""
10/20/01	06:10:02	<TT0__Ken>	TA Tips:
10/20/01	06:10:26	<TT0__Ken>	always learn cup breakouts as the key indicator, this is simply the stock moving over a prev high for longs, losing a prev low for shorts
10/20/01	06:11:01	<TT0__Ken>	the best cup patterns are those that take the stock over the high of the previous day
10/20/01	06:11:19	<TT0__Ken>	you've probably read my active trader magazine article, so I won't repeat the strategy here, a reprint is at the site
10/20/01	06:11:21	<TT0__Ken>	what else..
10/20/01	06:11:40	<TT0__Ken>	I don't find, especially in choppy markets, that MA or stochastics are useful for entry signals
10/20/01	06:11:47	<TT0__Ken>	because they yield far too many false entries
10/20/01	06:12:06	<TT0__Ken>	instead, we rely heavily on the tape, eg using time & sales
10/20/01	06:13:05	<TT0__Ken>	I'll post a quick example from yesterday..
10/20/01	06:13:21	<TT0__Ken>	a note..
10/20/01	06:13:37	<TT0__Ken>	I'll be posting many chart patterns throughout the seminar, to illustrate techniques
10/20/01	06:14:02	<TT0__Ken>	see http://www.daytrading-university.com/emlxoct19s.gif
10/20/01	06:14:13	<TT0__Ken>	this is a two-day EMLX chart..
10/20/01	06:14:35	<TT0__Ken>	in the live room yesterday I posted 22.65+ as the buy trigger for this stock
10/20/01	06:14:44	<TT0__Ken>	many new traders are afraid of buying breakouts..
10/20/01	06:14:52	<TT0__Ken>	yet these should account for 80%% of your trade entries
10/20/01	06:15:05	<TT0__Ken>	my first couple of years, I'd always try to be clever and buy bottoms and short tops
10/20/01	06:15:17	<TT0__Ken>	this produced a lot of stops, breakeven trades, and occasional wins
10/20/01	06:15:38	<TT0__Ken>	once I started going long on breakout two day highs, and shorting two-day lows, my percentages improved considerably
10/20/01	06:15:58	<TT0__Ken>	one key is filtering out false breakouts, I'll show you how in a little while
10/20/01	06:16:08	<TT0__Ken>	for now, let's look at choppy market trading techniques
10/20/01	06:16:26	<TT0__Ken>	How to Tell if It's a Chop Day or Trend/Breakout Day?
10/20/01	06:16:44	<TT0__Ken>	http://www.daytrading-university.com/compqoct19s.gif
10/20/01	06:16:50	<TT0__Ken>	lets start with this 3-day COMPQ chart..
10/20/01	06:17:17	<TT0__Ken>	you can see we had what I call a wide range day on the 17th, and two relatively narrow days this past thursday and friday, right?
10/20/01	06:17:56	<TT0__Ken>	traders, you should always decide on what trading strategy you'll be doing based on what the COMPQ and sector charts are telling you as the market unfolds each day, during the first 30 minutes
10/20/01	06:18:26	<TT0__Ken>	so, if the COMPQ is in a tight 20-point trading range and it's getting close to 10am, you should know there won't be much trading opportunity til the afternoon session at earliest
10/20/01	06:18:33	<TT0__Ken>	you want to avoid overtrading ...
10/20/01	06:18:47	<TT0__Ken>	what indicators do we look at, specifically?
10/20/01	06:18:51	<TT0__Ken>	let's start with...
10/20/01	06:19:15	<TT0__Ken>	Sector Percent Change from Open ... comparing relative strength of each sector as the market begins each day
10/20/01	06:19:48	<TT0__Ken>	I find it useful to have a sector-only percentage quote box, that I sort every 10-15 minutes or so during the day..
10/20/01	06:19:49	<TT0__Ken>	http://www.daytrading-university.com/sectoroct19.gif
10/20/01	06:20:23	<TT0__Ken>	you can see that GHA, the hardware sector, closed out strongest from the open yesterday, at +3.1%%, with the internets, $GIN, weakest, due to EBAY's drop
10/20/01	06:20:41	<TT0__Ken>	you must become intimately familiar with these tools, eg the nasdaq trin and the sector percentages
10/20/01	06:20:52	<TT0__Ken>	let's look at measurable criteria.. and technique
10/20/01	06:21:01	<TT0__Ken>	Sector percent change during the first 30 minutes
10/20/01	06:21:08	<TT0__Ken>	each ""phase"" of the trading day is distinct:
10/20/01	06:21:25	<TT0__Ken>	the first 30 minutes, which we break down into what solly, SBSH, calls ABC waves:
10/20/01	06:21:46	<TT0__Ken>	the open order clear phase, eg 9:30 til 9:40..
10/20/01	06:21:55	<TT0__Ken>	overnight orders are being worked by the mms
10/20/01	06:22:13	<TT0__Ken>	our reversals, eg the market tends to reverse roughly every 8-10 minutes during the 9:30-10am time window
10/20/01	06:22:36	<TT0__Ken>	so we anticipate reverals, and start to lighten up or fade out of positions, eg at 9:40, 9:50, and the 10am reversal
10/20/01	06:22:40	<TT0__Ken>	reversals..
10/20/01	06:22:51	<TT0__Ken>	(sorry it's 3:30am here in hawaii, on ""coffee time"" lol)
10/20/01	06:23:31	<TT0__Ken>	so within that first 30 minutes, it's an entire ""world into itself"" and is for experienced, say 2years+ , traders only
10/20/01	06:23:37	<TT0__Ken>	why? because you need to be effective at order routing
10/20/01	06:24:01	<TT0__Ken>	and you need to be able to enter and exit quickly, based on TRINQ , futures, and sector chart reversals
10/20/01	06:24:05	<TT0__Ken>	sector percentages..
10/20/01	06:24:35	<TT0__Ken>	Trading Tip #82: Look for which sectors pull ahead of (and lag) the rest of the pack, as the market opens each day, from 9:30 through 9:50
10/20/01	06:25:08	<TT0__Ken>	so if it's 9:35, and I see $GSO up +.6 percent, while the rest of them are down at +/- .3%%, then I'm now looking at..
10/20/01	06:25:14	<TT0__Ken>	(GSO is software)
10/20/01	06:25:18	<TT0__Ken>	MSFT, the tier 1 lead
10/20/01	06:25:35	<TT0__Ken>	ADBE SEBL CHKP BEAS VRSN (some of my core software stocks)
10/20/01	06:25:42	<TT0__Ken>	and see which of those has buy pressure in it
10/20/01	06:26:10	<TT0__Ken>	let's say all the sectors are down within +/- 0.5%% green or red, and it's 9:50... what does that tell me?
10/20/01	06:26:17	<TT0__Ken>	like yesterday, for instance..
10/20/01	06:26:29	<TT0__Ken>	it tells me the market is doing squat, and I'm unlikely to put on a trade
10/20/01	06:27:02	<TT0__Ken>	Trading Tip #05: We are always scanning for outliers, the lead and follow sectors, ""what's moving the most relative to the pack"" each day, as daytraders..
10/20/01	06:27:15	<TT0__Ken>	most new traders, myself included the first 18 months or so, react too slowly
10/20/01	06:27:40	<TT0__Ken>	I am often done trading early in the day, after nabbing what I assess to be most of the ""juice"" for the morning's session
10/20/01	06:27:47	<TT0__Ken>	you need to learn to react quickly
10/20/01	06:27:56	<TT0__Ken>	sector percentages.. what else..
10/20/01	06:29:17	<TT0__Ken>	Scenario #1: It's 9:42 am and you see that the $GSO (software) sector is up +.4%% and rising.. you also see that the $GIN is 0.1%% and rising. If the chart patterns /tape of ADBE and EBAY are the same, which do you go long in?
10/20/01	06:29:28	<TT0__Ken>	remember to learn discriminant trading...
10/20/01	06:29:48	<TT0__Ken>	show of hands, I'm sure many of you have to decide, ""ok the market's headed up, do I choose stock A or stock B?""
10/20/01	06:29:53	<TT0__Ken>	ok then..
10/20/01	06:30:03	<TT0__Ken>	we look at the sector relative strength for a clue..
10/20/01	06:30:29	<TT0__Ken>	in the above scenario, all else being equal, we flip long into ADBE, a software stock, over EBAY, an internet, since it's underlying sector is stronger
10/20/01	06:30:43	<TT0__Ken>	you're always looking for these micro-data points to support your putting on the trade
10/20/01	06:31:20	<TT0__Ken>	and look at the sector chart patterns too... eg if the hardware chart, GHA, is making a new high of day, and the internet chart, GIN, is chopping midrange .. you would be more likely to trade long hardware
10/20/01	06:31:35	<TT0__Ken>	and yet, so many traders completely fail to use these techniques, don't even know what the trinq is ...
10/20/01	06:31:47	<TT0__Ken>	""Don't bring a butter knife to a gun fight""
10/20/01	06:31:58	<TT0__Ken>	eg you're trading against guys like me, and market makers, who have all this down cold..
10/20/01	06:32:15	<TT0__Ken>	and if you wonder why you seem to buy tops, or get shaken out too often.. the answers are often that..
10/20/01	06:32:17	<TT0__Ken>	you're too slow
10/20/01	06:32:23	<TT0__Ken>	you failed to recognize and integrate the signals
10/20/01	06:32:42	<TT0__Ken>	you had an unprofessional rookie setup, eg aol and etrade or something
10/20/01	06:32:53	<TT0__Ken>	you didn't have a professional data feed
10/20/01	06:33:06	<TT0__Ken>	all these things, are merely the admission ticket, they don't address your trading skills
10/20/01	06:33:18	<TT0__Ken>	it's like going to the country club, you need to Not have kmart golf clubs
10/20/01	06:33:44	<TT0__Ken>	you need to buy the Pings, or whatever, and get training by , most likely, a variety of club pros, who can shed light on the technniques you need
10/20/01	06:33:53	<TT0__Ken>	so anyways... be prepared with the indicators..
10/20/01	06:33:55	<TT0__Ken>	let's move on..
10/20/01	06:34:14	<TT0__Ken>	Trading Choppy Markets, Fibonacci Retracements Part I
10/20/01	06:34:29	<TT0__Ken>	fibonacci retracements are one of the few indicators I use constantly...
10/20/01	06:34:38	<TT0__Ken>	and I'm not using them in a software program..
10/20/01	06:34:48	<TT0__Ken>	rather, you learn to break the trading range into fibo regions..
10/20/01	06:35:13	<TT0__Ken>	I use as a rule of thumb, ""after a stock makes a large move, say close to it's average intraday trading range, it will often reverse to 1/3 to 50%% of the total range""
10/20/01	06:35:17	<TT0__Ken>	here's an example:
10/20/01	06:35:26	<TT0__Ken>	fibos http://www.daytrading-university.com/gmstoct19b.gif
10/20/01	06:35:36	<TT0__Ken>	from yesterday in the room.. we were in and out in the range indicated
10/20/01	06:36:01	<TT0__Ken>	that's a two-day chart..
10/20/01	06:36:07	<TT0__Ken>	what I want you to see is..
10/20/01	06:36:22	<TT0__Ken>	see the sharp selloff, in the second day?
10/20/01	06:36:49	<TT0__Ken>	bounce trades, again should be <20%% of your trades, we like following sharp over-1 point moves, after a micro-cup breakout
10/20/01	06:37:03	<TT0__Ken>	so we were in after it chopped and buyers started to come back..
10/20/01	06:37:13	<TT0__Ken>	and out at roughly 50%% of the total range that it had dropped
10/20/01	06:37:15	<TT0__Ken>	learn that pattern
10/20/01	06:37:29	<TT0__Ken>	and we were out early in the bounce, eg on the way up..
10/20/01	06:38:01	<TT0__Ken>	Trading Tip #107: In this market, make sure to work out of your positions early, at the first sign of the time & sales getting back to even..
10/20/01	06:38:31	<TT0__Ken>	eg you're in the direction of the tape, let's say it's 70%% people hitting the ask.. the price goes up.. as soon as it starts to get xmas tree on the tape..
10/20/01	06:38:33	<TT0__Ken>	green and red..
10/20/01	06:38:48	<TT0__Ken>	you start to trail a close stop, say 3-4 spreads, max .2 back from the current inside market
10/20/01	06:39:06	<TT0__Ken>	my max stop loss on all daytrades is .4, however 80%%+ are from ""even to .2""
10/20/01	06:39:10	<TT0__Ken>	I tend to be very risk averse..
10/20/01	06:39:25	<TT0__Ken>	average daytrading timing should be 2 to 15 minutes
10/20/01	06:39:28	<TT0__Ken>	roundtrip..
10/20/01	06:39:33	<TT0__Ken>	almost always less than 10 minutes
10/20/01	06:40:01	<TT0__Ken>	in a breakout market, I may well stay in the position a few extra minutes, trailing an ever-closer stop, to max the profit before a reversal or chop occurs
10/20/01	06:40:08	<TT0__Ken>	I do Not sit through consolidation periods
10/20/01	06:40:17	<TT0__Ken>	much less reversals against my trade :0 lol
10/20/01	06:40:23	<TT0__Ken>	be in and out fast..
10/20/01	06:40:33	<TT0__Ken>	daytrading like ""3 fs"".. eg find it, (trade) it, and forget it.. move on.. be fast
10/20/01	06:40:46	<TT0__Ken>	examples of the types of stocks to daytrade..
10/20/01	06:41:07	<TT0__Ken>	I find that many new traders (myself included at first) liked to trade cheap stocks that were under $20/share
10/20/01	06:41:10	<TT0__Ken>	this is a Big mistake
10/20/01	06:41:29	<TT0__Ken>	because it's much harder to correctly take +1/2 or better out of sub-$20 stocks for fast daytrades
10/20/01	06:41:41	<TT0__Ken>	these are examples of charts from yesterday I want you to check out..
10/20/01	06:41:43	<TT0__Ken>	wide range: AMAT EBAY EMLX IDTI SYMC
10/20/01	06:41:57	<TT0__Ken>	these stocks are all priced $20-$60 and have nice 3-4 point trading ranges
10/20/01	06:42:05	<TT0__Ken>	in other words, it's ""easier to get it right""
10/20/01	06:42:29	<TT0__Ken>	than with the cheap stocks, which often chop, and run a max of 1 pt in a single direction, usually chop in a 1/2 to 3/4 point range..
10/20/01	06:42:36	<TT0__Ken>	making risk:reward ratio not as powerful
10/20/01	06:43:00	<TT0__Ken>	Trading Choppy Markets Part II: Bounce Trades - Time & Sales Signals and Chart Patterns..
10/20/01	06:43:16	<TT0__Ken>	we'll pretty much stay on track throughout the session, re the timing..
10/20/01	06:43:36	<TT0__Ken>	wondering where the other 400 who signed up were.. ah well I guess the _ underline was too tough to understand ..lol
10/20/01	06:44:03	<TT0__Ken>	if any of the charts dont come up, let me know.. may be everyone's hitting the server at once
10/20/01	06:44:31	<TT0__Ken>	time & sales..
10/20/01	06:44:47	<TT0__Ken>	Traders, understanding how to use Time & Sales Correctly is Critical to Success as a daytrader
10/20/01	06:45:11	<TT0__Ken>	unfortunately, there's a lot of misinformation out there, bs sites that tried to copy me, and don't really understand the techniques..
10/20/01	06:45:28	<TT0__Ken>	so, let's start with the most important ideas..
10/20/01	06:46:03	<TT0__Ken>	1) Time & sales has a lot of noise in it. To be successful, you need to be able to read the timing, when the buy/sell ratio starts to shift
10/20/01	06:46:29	<TT0__Ken>	the only way to master this is to study the tape, don't choose a high volume most active, choose a tier two stock, like the ones I've mentioned
10/20/01	06:47:15	<TT0__Ken>	Traders' Tape Reading Exercise: Choose one of your core basket trading stocks. For one day each week, study the tape, the time & sales, for the 9:40-10:10 time period, closely.
10/20/01	06:47:26	<TT0__Ken>	that's 30 minutes, once a week
10/20/01	06:47:49	<TT0__Ken>	I'm your drill sergeant, this is an exercise that should help you develop 'the eye' for detecting reversals
10/20/01	06:48:05	<TT0__Ken>	here's what to look for:
10/20/01	06:48:30	<TT0__Ken>	2) Block trades (over 10K) and out-of-market trades are unimportant by themselves.
10/20/01	06:48:44	<TT0__Ken>	what's important is, the crowd's reaction, if there is one..
10/20/01	06:49:17	<TT0__Ken>	so, lets say the tape is ticking by... something occurs, let's say a 50K out of market trade 3 spreads short (down from inside market)..
10/20/01	06:49:26	<TT0__Ken>	this is for, say BRCD..
10/20/01	06:49:32	<TT0__Ken>	by itself, it's a ""so what""..
10/20/01	06:49:59	<TT0__Ken>	what counts is, lets say starting 20-30 transactions later, does what ""had been a run up"" start to fade, and traders get nervous, and start hitting the bid?
10/20/01	06:50:20	<TT0__Ken>	if this occurs, you can either a) exit a long you were in, or b) fire off a short
10/20/01	06:50:47	<TT0__Ken>	and of course, when it comes to shorting, make sure to keep the bid tick arrow and your trade execution software side by side so you can try repeatedly if need be for a fill
10/20/01	06:50:56	<TT0__Ken>	it's tough to get an uptick in this market, it's much more volatile
10/20/01	06:51:04	<TT0__Ken>	that's great though, from an overall trading standpoint
10/20/01	06:51:20	<TT0__Ken>	Trading right now is Much more exciting since the SEC 25K rule, less liquidity and more volatility
10/20/01	06:51:50	<TT0__Ken>	I said this would occur, eg ""once the SEC shuts out small traders, daytrading opportunities will all of a sudden get much better""
10/20/01	06:51:57	<TT0__Ken>	not that I'm a cynic or anything, mind ya
10/20/01	06:52:30	<TT0__Ken>	so, now is a good time for experienced traders, but Much more risky for new traders
10/20/01	06:53:06	<TT0__Ken>	I enabled close to 700 passwords last night, burned the midnight oil, and 1/3 show up.. ah well, c'est la vie
10/20/01	06:53:15	<TT0__Ken>	ok moving right along..
10/20/01	06:53:22	<TT0__Ken>	Bounce signals ..
10/20/01	06:53:39	<TT0__Ken>	bounces, reversals, again should be <20%% of your total trades..
10/20/01	06:53:54	<TT0__Ken>	ignore Totally that ""stochastics bouncing noodles cranks uptick"" crap you may see
10/20/01	06:54:00	<TT0__Ken>	that is erroneous..
10/20/01	06:54:29	<TT0__Ken>	do a study yourself, eg look at how many ""false positives"" a 10%% or 20%% stoch crossover yields, for a group of your favorite 10 trading stocks..
10/20/01	06:54:42	<TT0__Ken>	you need to use the sector strength, the time & sales, the TRINQ, and specific chart patterns
10/20/01	06:54:44	<TT0__Ken>	that's what counts
10/20/01	06:54:50	<TT0__Ken>	bounce trade guidelines:
10/20/01	06:55:17	<TT0__Ken>	Bounce trades: make sure it's a multipoint, or at least over 1 point , drop and volume reversal for a long bounce..
10/20/01	06:55:41	<TT0__Ken>	eg look at the volume bars.. need to have higher volume on the reversal than preceding it, on the way down, to confirm a bounce entry
10/20/01	06:55:53	<TT0__Ken>	best bounce trades are those that occur off a previous day's low support
10/20/01	06:56:21	<_Walter6>	The _ in the name keep me out for awhile Walter6
10/20/01	06:56:24	<TT0__Ken>	eg the AMAT drops 1.4 points to near the previous day's low and then consolidates, quickly starts to get short covering, and ""a bounce is born""
10/20/01	06:56:39	<TT0__Ken>	which you get into long, and get out of, at the fibo retrace, or first sign o trouble
10/20/01	06:56:47	<TT0__Ken>	we'll look at more later..
10/20/01	06:56:52	<TT0__Ken>	let's move on..
10/20/01	06:57:07	<TT0__Ken>	Daytrading Breakout and Trending Market Days ... What to Look for
10/20/01	06:57:26	<TT0__Ken>	a breakout day is simply any day where the stock is moving above the previous days high or below the previous days low
10/20/01	06:57:34	<TT0__Ken>	see http://www.Daytrading-University.com/dtuliveroomstrategy.htm
10/20/01	06:57:40	<TT0__Ken>	the top chart, the COMPQ..
10/20/01	06:58:00	<TT0__Ken>	what you're looking for is a true breakout, not a chop near a prev high
10/20/01	06:58:20	<TT0__Ken>	the strategy I like to use is to set a conservative entry .3 to .6 above the whole number over the previous day's high
10/20/01	06:58:33	<TT0__Ken>	like our EMLX entry, didn't occur til later in the session, was good for a nice move
10/20/01	06:58:47	<TT0__Ken>	http://www.daytrading-university.com/bgenoct19.gif
10/20/01	06:59:02	<TT0__Ken>	that's another fibonacci example chart.. the bgen one..
10/20/01	06:59:29	<TT0__Ken>	the point is, the exit is about midrange from the total drop, for a bounce
10/20/01	06:59:42	<TT0__Ken>	ok so for breakouts, let's look at our sector tier stocks..
10/20/01	07:00:09	<TT0__Ken>	we do not trade stocks like INTC MSFT for daytrades, since the intraday ranges are less favorable than other stocks in their sectors
10/20/01	07:00:30	<TT0__Ken>	they Are used, however , as indicators, along with the sector chart, eg $SOX $GSO , and compq, trinq , nas futs etc
10/20/01	07:01:02	<TT0__Ken>	tier I stocks are simply the big caps, the ones that tend to move the sectors the most
10/20/01	07:01:26	<TT0__Ken>	we use them as a type of confirming/leading indicator, for entries in our trading stocks, which are often called the tier 2s..
10/20/01	07:01:44	<TT0__Ken>	sometimes we trade the lead tier 1s eg AMAT KLAC in semis, AMGN BGEN in biotechs, ADBE in software
10/20/01	07:02:02	<TT0__Ken>	the main point is, learn how to read the signals that the tier lead stocks are generating..
10/20/01	07:02:16	<TT0__Ken>	eg are they making a new high for the day, or just chopping around?
10/20/01	07:02:47	<TT0__Ken>	http://www.daytrading-university.com/emlxoct19s.gif is a great example of breakout trading
10/20/01	07:03:13	<TT0__Ken>	by contrast, the http://www.daytrading-university.com/gmstoct19b.gif
10/20/01	07:03:19	<TT0__Ken>	provides a good example of bounce trading
10/20/01	07:03:33	<TT0__Ken>	both alerts from yesterday in the live room.. Which one yielded better profit?
10/20/01	07:03:46	<TT0__Ken>	the gmst, was good for say +1/2 or 5/8
10/20/01	07:03:50	<TT0__Ken>	the EMLX, much more..
10/20/01	07:04:07	<TT0__Ken>	which is why breakout trading is preferred, and what most of us who are professionals like to trade heavy
10/20/01	07:04:31	<TT0__Ken>	eg for those two trades, I might do say 400 shares on the GMST, but 600-800 shares on the EMLX
10/20/01	07:04:43	<TT0__Ken>	so, weight your share/trade size accordingly, by the ""type of chart pattern""
10/20/01	07:04:49	<TT0__Ken>	also, the time of day is critical...
10/20/01	07:05:01	<TT0__Ken>	I tend to trade heaviest from 9:40 til 11am.. tue wed thur..
10/20/01	07:05:16	<TT0__Ken>	secondary strong time is friday afternoons, esp triple witching (like yesterday)
10/20/01	07:05:52	<TT0__Ken>	If I were to choose the 'gold hours' that I make most of my trades in, that I would concentrate on, they are:
10/20/01	07:06:10	<TT0__Ken>	the 9:40 til 11am, Tue Wed Thur and 2:30-3:30 fri afternoon
10/20/01	07:06:16	<TT0__Ken>	time of day effects are important..
10/20/01	07:06:22	<TT0__Ken>	and they gate my trading behavior..
10/20/01	07:06:39	<TT0__Ken>	eg I'd trade lighter at 11:30 unless there's a compelling reason, eg strong compq breakout..
10/20/01	07:07:00	<TT0__Ken>	Traders, always assess where your stock is, relative to the previous day's trading range
10/20/01	07:07:08	<TT0__Ken>	and the micro support/resistance levels within the range
10/20/01	07:07:19	<TT0__Ken>	as I said in my Active Trader mag article, pro money looks at OHLC
10/20/01	07:07:36	<TT0__Ken>	the open high low close.. and buy/sell progs are triggered at highs/lows from the previous day
10/20/01	07:07:48	<TT0__Ken>	I have found that these are the trades that follow through the best
10/20/01	07:08:00	<TT0__Ken>	and this is the most important factor in daytrading, from what I've found..

 

---

10/20/01	07:08:15	<TT0__Ken>	eg avoiding, or minimizing, trades that occur within the range established by the previous day
10/20/01	07:08:30	<TT0__Ken>	and instead, developing specific techniques that work for the powerful out-of-range moves
10/20/01	07:08:46	<TT0__Ken>	this is selective trading, and requires patience..
10/20/01	07:09:24	<TT0__Ken>	the good news is, we're having a much higher percentage of breakout/breakdown days recently, the last several weeks
10/20/01	07:09:31	<TT0__Ken>	summer, as usual, was a lot of chop
10/20/01	07:09:54	<TT0__Ken>	as we get into the 4th quarter, expect better volatility since fund mgr inst. money window dressing etc, will increase volatility
10/20/01	07:10:11	<TT0__Ken>	so we ride on the coattails of institutional money etc, Once we've learned the specific breakout patterns
10/20/01	07:10:20	<TT0__Ken>	lets see if we can get over 200 people here :)
10/20/01	07:10:33	<TT0__Ken>	saturday morning, early for all (4:10am here local time)
10/20/01	07:10:47	<TT0__Ken>	ok lets move on..
10/20/01	07:11:08	<TT0__Ken>	Dangers of Late Entries: 4 Warning Signs Every Trader Has to Be Able to Spot
10/20/01	07:11:57	<TT0__Ken>	#1: Know the length, in points, and timing, of the average runs for your stock at each segment of the trading day, and don't enter say 70%% of the way into the run
10/20/01	07:12:21	<TT0__Ken>	example, let's say you know BRCD runs about .8 in single moves..
10/20/01	07:12:33	<TT0__Ken>	so, you don't go long after it's already run .6 in the direction of your trade
10/20/01	07:12:50	<TT0__Ken>	lets say you know it moves roughly 8 minutes before reversing, chopping..
10/20/01	07:12:58	<TT0__Ken>	you don't enter minute 6 into the same direction
10/20/01	07:13:01	<TT0__Ken>	learn that stuff
10/20/01	07:13:14	<TT0__Ken>	#2: sector /trinq reversals ..
10/20/01	07:13:36	<TT0__Ken>	make sure you keep a close eye on the TRINQ and the sector charts, eg $GSO, and you don't enter late into a single-direction run
10/20/01	07:13:54	<TT0__Ken>	#3: tape dries up, low volume before reverse :
10/20/01	07:14:11	<TT0__Ken>	make sure to learn how the tape operates, to gauge net buy/sell pressure
10/20/01	07:14:20	<TT0__Ken>	Over 200 people here so far... :)
10/20/01	07:14:33	<TT0__Ken>	amazing what the word ""free"" does ...lol
10/20/01	07:14:52	<TT0__Ken>	so anyways, you're watching to make sure that you're Not entering a reversal play if the volume is lower
10/20/01	07:14:57	<TT0__Ken>	in the direction you're entering in..
10/20/01	07:15:04	<TT0__Ken>	as that's likely just a pause in the downtrend etc
10/20/01	07:15:08	<TT0__Ken>	and finally
10/20/01	07:15:22	<TT0__Ken>	#4: sudden nas futures/trinq spikes
10/20/01	07:15:27	<TT0__Ken>	this is so critical
10/20/01	07:15:40	<TT0__Ken>	in this volatile market, you see Strong fast moves
10/20/01	07:16:00	<TT0__Ken>	which means you have to keep a sharp eye on the COMPQ and TRINQ and nas futures, for a move through a previous sup/res level
10/20/01	07:16:16	<TT0__Ken>	so, those are some new things I'll bet you haven't heard elsewhere
10/20/01	07:16:37	<TT0__Ken>	because most of the stuff out there is bs, not the depth of detail you need , to really learn daytrading ... ok let's move on
10/20/01	07:16:53	<TT0__Ken>	hopefully you are learning some new techniques, at least initial exposure to them
10/20/01	07:17:01	<TT0__Ken>	daytrading is a lot like an iceberg
10/20/01	07:17:23	<TT0__Ken>	most traders get into momentum ""buy it now noodles crank JNPR running who's your daddy "" chat rooms, and Lose their butts
10/20/01	07:17:43	<TT0__Ken>	the truth is, this is a profession, like engineering, and you need to take a couple years to learn it
10/20/01	07:17:46	<TT0__Ken>	mostly on your own
10/20/01	07:18:14	<TT0__Ken>	sure, go out there and listen to everyone, buy all the books, watch the tapes,
10/20/01	07:18:24	<TT0__Ken>	but ultimately, you need to be prepared for hard work and testing
10/20/01	07:18:27	<TT0__Ken>	and experimentation..
10/20/01	07:19:07	<TT0__Ken>	ok last point.. daytrader risk mgmt.. position sizing
10/20/01	07:19:13	<TT0__Ken>	last point for this section..
10/20/01	07:19:36	<TT0__Ken>	Daytrader Risk Mgmt: Dynamic Position Sizing & Pivot Plays, Using L2/T&S etc..
10/20/01	07:20:09	<_Pat3a>	m,
10/20/01	07:20:15	<TT0__Ken>	let's look at dynamic sizing..
10/20/01	07:20:26	<TT0__Ken>	from a risk mgmt standpoint , learn this..
10/20/01	07:20:52	<TT0__Ken>	I have found over the years that it makes sense to weight your trade, eg trade many vs few shares, based on the ""running odds"" of all the data I have
10/20/01	07:21:18	<TT0__Ken>	so, if it's a choppy narrow range day, 10:10am and the lead sector is only up +1.3%% , most stocks in midrange chop, I will
10/20/01	07:21:29	<TT0__Ken>	either trade not at all, or on a breakout.. I may do say 400 shares max
10/20/01	07:21:45	<TT0__Ken>	if we're in a strong day, you get to the point where you can tell ""something's happening""
10/20/01	07:21:53	<TT0__Ken>	this is an exciting time, eg yesterday afternoon
10/20/01	07:22:02	<TT0__Ken>	you can tell there's pressure in the market, a trend has developed
10/20/01	07:22:07	<TT0__Ken>	you are no longer in ""chop city""
10/20/01	07:22:22	<TT0__Ken>	so you put on heavier trades.. selectively
10/20/01	07:22:40	<TT0__Ken>	so I may do 600-800 shares for a long in a breakout day, go a bit heavier
10/20/01	07:23:07	<TT0__Ken>	Dynamic Position Sizing.. what's this, and why do I care?
10/20/01	07:23:11	<TT0__Ken>	ok glad you asked..
10/20/01	07:23:22	<TT0__Ken>	most new traders think of each trade as a ""do or die""
10/20/01	07:23:26	<TT0__Ken>	eg ""all or nothing""
10/20/01	07:23:35	<TT0__Ken>	and in time, you learn that you want to 'nudge' more out the trade
10/20/01	07:23:46	<TT0__Ken>	much like nudging a pinball table, to keep the ball in play
10/20/01	07:23:51	<TT0__Ken>	you can tell, I like analogies
10/20/01	07:24:18	<TT0__Ken>	if we're in a breakout day, in a breakout stock, I will often add 1/3 to 1/2 more to an initial position, if we're continuing in the direction of my trade successfully
10/20/01	07:24:49	<TT0__Ken>	so let's say I'm in EMLX 22.6+ for 500 shares yesterday at 1:30
10/20/01	07:25:31	<TT0__Ken>	I am trailing a stop, its still good, I may add another 200 shares once it clears the 23, eg at 23.2
10/20/01	07:25:36	<_larry92>	ann, Boca Raton Florida. Aloha! [msg complete]
10/20/01	07:25:58	<TT0__Ken>	and if the tape looks good, I may stay in, or fade out 400 of the 700 shares on a tape reversal
10/20/01	07:26:08	<TT0__Ken>	as it reaches 'elasticity' and starts to head south..
10/20/01	07:26:10	<TT0__Ken>	the keys are:
10/20/01	07:26:33	<TT0__Ken>	1: Dynamic Position Sizing: Adding to (or partially subtracting from) and initial position in the same stock
10/20/01	07:26:59	<TT0__Ken>	2: Trading dynamics: you want to have your add-on be 1/2 or less than your initial size
10/20/01	07:27:20	<TT0__Ken>	it's pyramiding with a large base, smaller top... many traders screw it up and do it in reverse..
10/20/01	07:27:36	<TT0__Ken>	eg buy 200 initially, then add another 400 later..
10/20/01	07:27:37	<TT0__Ken>	wrongo
10/20/01	07:27:49	<TT0__Ken>	your risk is lower at the first entry, so your size should be heavier
10/20/01	07:28:44	<TT0__Ken>	hmm.. scott was scheduled to be here now, for L2 order routing, don't see him..maybe later..
10/20/01	07:29:01	<TT0__Ken>	anyways, dynamic sizing.. this is a way to be a ""force multiplier"" in your trade
10/20/01	07:29:12	<TT0__Ken>	can you tell I've been watching cnn :-p
10/20/01	07:29:21	<TT0__Ken>	and you exit heavy first, light later..
10/20/01	07:29:30	<TT0__Ken>	you're managing risk w/running odds..
10/20/01	07:30:06	<TT0__Ken>	eg in 500, add +200... current total +700 long.. at first sign o trouble, sell -500, then sell -200 .. or whatever, 400/300, whatever you think based on what the tape and the nas futs and trinq are doing
10/20/01	07:30:42	<TT0__Ken>	pivot plays, bounces, risk mgmt, you're always using the prev bottom as your max stop loss, eg with that GMST bounce, we'd have a -.3 max stop
10/20/01	07:30:58	<TT0__Ken>	you cannot have breakeven trading and make profits for anyone but your broker,
10/20/01	07:31:12	<TT0__Ken>	eg you can do 50/50 trading and be fine, as long as stops are smaller than wins of course
10/20/01	07:31:21	<TT0__Ken>	but it's best to simply be more selective and Learn how to trade
10/20/01	07:31:39	<TT0__Ken>	there is So much misinformation, or I should perhaps say, Incomplete information out there..
10/20/01	07:31:58	<TT0__Ken>	much is newbie-geared, eg ""you must have discipline, grasshopper"" ""fear is good""
10/20/01	07:32:08	<TT0__Ken>	hah..
10/20/01	07:32:17	<TT0__Ken>	if you're to succeed at this, people, it's a lot of hard work
10/20/01	07:32:51	<TT0__Ken>	I am a UCLA grad, have two degrees, was a statistician/quality engineer at Ford, Rockwell, Boeing .. and it was all Easy compared to daytrading
10/20/01	07:33:06	<TT0__Ken>	so I'm used to looking for patterns in chart data, for outliers
10/20/01	07:33:25	<TT0__Ken>	and applying this to the markets took me over 18months to learn..over 3x as long as I thought it would..
10/20/01	07:33:28	<TT0__Ken>	ok next topic..
10/20/01	07:33:51	<TT0__Ken>	I want to make sure you all understand the ""go/ no-go"" signals for trade entries
10/20/01	07:34:00	<TT0__Ken>	and the correct use of each..
10/20/01	07:34:45	<TT0__Ken>	note: if you're not prepared to use a direct access broker, have 3-4 monitors minimum, have a DSL/cablemodem/T1 line or faster, a pro quote system, and a strong work ethic, then please don't even think about daytrading for a living
10/20/01	07:34:48	<TT0__Ken>	it's a profession
10/20/01	07:35:25	<TT0__Ken>	and I don't care what broker or software you use, unlike my competitors I dont need advertising revenue, I'm independent, and live in hawaii... I do this for shits n giggles i suppose you could say...
10/20/01	07:35:31	<TT0__Ken>	also trading gets boring by yourself
10/20/01	07:35:38	<TT0__Ken>	especially on an island at 3am
10/20/01	07:35:40	<TT0__Ken>	lol
10/20/01	07:35:46	<TT0__Ken>	so, it's fun to interact w/folks..
10/20/01	07:35:50	<TT0__Ken>	anyways..
10/20/01	07:36:03	<TT0__Ken>	the point is, get pro tools, be prepared to work hard
10/20/01	07:36:13	<TT0__Ken>	and no swing trading isn't easier..
10/20/01	07:36:27	<TT0__Ken>	it has both more risk and more reward, we'll cover swingtrading techniques this afternoon
10/20/01	07:36:42	<TT0__Ken>	personally, I prefer daytrading in this market, I havent done much swingtrading since '99
10/20/01	07:36:52	<TT0__Ken>	as I like a trending market up for swings
10/20/01	07:37:24	<TT0__Ken>	Traders, please think up some questions, we will answer them in a little while, eg 20 minutes...
10/20/01	07:37:39	<TT0__Ken>	And please think up your Toughest, most difficult questions..
10/20/01	07:37:48	<TT0__Ken>	your most advanced, give it to me..
10/20/01	07:38:03	<TT0__Ken>	not interested in ""what graphics card should I use?""
10/20/01	07:38:09	<TT0__Ken>	or ""what broker is best""
10/20/01	07:38:24	<TT0__Ken>	or ""why can't I trade using my aol 56k dialup modem?""
10/20/01	07:38:36	<TT0__Ken>	let's keep any interaction with me on a more professional trader basis..
10/20/01	07:38:41	<TT0__Ken>	at least, intelligent questions..
10/20/01	07:38:50	<TT0__Ken>	there are many others out there, that cater to newbies
10/20/01	07:38:52	<TT0__Ken>	I'm not one of them
10/20/01	07:38:58	<TT0__Ken>	(^_^)
10/20/01	07:39:03	<lucv>	i suppose you use a systematic approach to trading, i.e. using a quantifiable trading strategy
10/20/01	07:39:18	<TT0__Ken>	I find it much more interesting to play in the pro arena, at least in intermediate/experienced trader Q&A
10/20/01	07:39:28	<TT0__Ken>	next round of tips coming up..
10/20/01	07:40:14	<TT0__Ken>	Proper use of order routing and L2
10/20/01	07:40:24	<TT0__Ken>	you do not try to find out if MLCO is a buyer etc...
10/20/01	07:40:28	<TT0__Ken>	post SEC guidelines..
10/20/01	07:40:40	<TT0__Ken>	post SEC 25K margin rule sept 28 guidelines...
10/20/01	07:41:00	<TT0__Ken>	Tip 1: Market makers are much harder to hit now, they are flipping around within the inside 3 levels..
10/20/01	07:41:19	<TT0__Ken>	so you can try an soes them, I find though that I'm still doing 80%% of my trades via ecns, eg ISLD/ARCA
10/20/01	07:41:45	<TT0__Ken>	so don't try and read anything into what SBSH is doing.. it's rare to see sustained support
10/20/01	07:41:49	<TT0__Ken>	here's the thing you need to know..
10/20/01	07:42:19	<TT0__Ken>	Look at both INCA and specific mm activity, see what the support/res is on the tape/L2 for 3-4 consecutive spreads in a single direction
10/20/01	07:42:25	<TT0__Ken>	what do I mean by this?
10/20/01	07:42:53	<TT0__Ken>	simply, it's ""significant"" if a mm, or a mm hiding in INCA/other ecn, provides price support in the tape for several consecutive spreads in a single direction
10/20/01	07:43:24	<TT0__Ken>	meaning, you see EMLX tick up 22.65, 22.70, 22.78, 22.82 etc
10/20/01	07:43:45	<TT0__Ken>	whatever those price bands/levels are in L2, you want to see movement sustained for at least a few spreads, to indicate the strength
10/20/01	07:44:08	<TT0__Ken>	then, you're using L2 and the tape, time & sales together, as a barometer to help you find your entry
10/20/01	07:44:53	<TT0__Ken>	Tip 2: Don't always pay out with limit orders 3 spreads out of market
10/20/01	07:45:15	<TT0__Ken>	odds are, you can get an ISLD fill with a 1-spread out of market order, you need to ""fish"" for entries, eg set the order out there, see if you get a nibble
10/20/01	07:45:34	<TT0__Ken>	eg limit (1 spread up) ISLD, let it sit for 5 secs or so, see if you get hit
10/20/01	07:45:38	<TT0__Ken>	if not, cancel, and re-enter..
10/20/01	07:45:46	<TT0__Ken>	don't always pay out of market, that's what mm's love..
10/20/01	07:45:52	<TT0__Ken>	and you are increasing your risk..
10/20/01	07:46:06	<TT0__Ken>	it's not so much the cost of the spreads, which is thankfully smaller due to decimals
10/20/01	07:46:10	<TT0__Ken>	but the fill speed
10/20/01	07:46:30	<TT0__Ken>	if you are getting bad fills, it's Not because you weren't willing to pay up 3 spreads for an ISLD fill
10/20/01	07:46:33	<TT0__Ken>	it's TIMING..
10/20/01	07:46:35	<TT0__Ken>	you are LATE
10/20/01	07:46:44	<TT0__Ken>	and you we'rent watching the TAPE closely enough
10/20/01	07:46:48	<TT0__Ken>	or you hesitated
10/20/01	07:47:14	<TT0__Ken>	show of hands, how many of you have experienced ""traders' block?"" , or ""you knew you should be in, but you didn't go for it?""
10/20/01	07:47:17	<TT0__Ken>	and woops there it is..
10/20/01	07:47:22	<TT0__Ken>	went up +3/4 without ya
10/20/01	07:47:23	<TT0__Ken>	lol
10/20/01	07:47:32	<TT0__Ken>	happened to me a lot years ago..
10/20/01	07:47:42	<TT0__Ken>	still does, if I'm off my game, or tired, or whatever..
10/20/01	07:47:49	<TT0__Ken>	usually though, you learn, that the first entry, is the best
10/20/01	07:48:00	<TT0__Ken>	and so you decide ahead of time where you should be in that stock
10/20/01	07:48:06	<TT0__Ken>	for example, premarket alerts..
10/20/01	07:48:21	<TT0__Ken>	Traders, your Daily Trading Plan: Keeping it Short and Focused
10/20/01	07:48:31	<TT0__Ken>	each day before the market opens, I do this:
10/20/01	07:49:09	<TT0__Ken>	1. For my core trading stocks, I look at each of them on a 2day chart, and identify the whole number above the high of the previous day
10/20/01	07:49:39	<TT0__Ken>	2. Next ,I look at premarket activity
10/20/01	07:49:57	<TT0__Ken>	make sure your charts can show premarket activity, eg mine are set to start plotting the trades that occur from 8:30 til 9:30
10/20/01	07:49:59	<TT0__Ken>	this is important
10/20/01	07:50:06	<TT0__Ken>	so you can see premarket gaps, trends, and gap fills
10/20/01	07:51:14	<TT0__Ken>	3. Decide on Both short and long triggers , initial ones, before the market opens
10/20/01	07:51:37	<TT0__Ken>	I found that shifting my energy as a trader to doing a lot of premkt ta work, eg from 8:30-9:30am daily, was a tremendous help
10/20/01	07:52:02	<TT0__Ken>	that way I'm not panicking into or out of positions... I have already identified where the entries should be
10/20/01	07:52:18	<TT0__Ken>	and I can always pull them in, adjust them, during the live market based on the trinq, sectors etc
10/20/01	07:52:33	<TT0__Ken>	eg I had posted EMLX buy if it gets over 22.65 hours ahead of time..
10/20/01	07:52:42	<TT0__Ken>	I knew where the ""hurdle"" should be set,
10/20/01	07:52:51	<TT0__Ken>	eg if it was strong enough to get there, it would likely continue, which it did
10/20/01	07:53:36	<TT0__Ken>	and this is key
10/20/01	07:53:56	<TT0__Ken>	Your daily trading plan should have you Identifying key support/resistance before the market opens
10/20/01	07:54:02	<TT0__Ken>	for each stock in your core trading basket
10/20/01	07:54:17	<TT0__Ken>	then, simply set your software to alert you 1/2 point early or so, so you can pull it up and manage the trade
10/20/01	07:55:32	<TT0__Ken>	what else..
10/20/01	07:55:47	<TT0__Ken>	you should ideally choose from among stocks in the strong sectors, for your breakouts
10/20/01	07:55:56	<TT0__Ken>	and set your alerts ahead of time, so you can..
10/20/01	07:56:17	<TT0__Ken>	During the market, you want to focus on How to execute your trade, not just ""where/when to trade it""
10/20/01	07:56:43	<TT0__Ken>	by setting your alerts ahead of time, having some idea as to where you'd like to be a buyer or shorter of the stock,
10/20/01	07:57:06	<TT0__Ken>	you can reserve your trading energy for managing the entry, instead of figuring out on the fly to ""buy it now or not?""
10/20/01	07:57:30	<TT0__Ken>	I have found that this works very well, and you can always modify, adjust the entry as needed later, which I often do
10/20/01	07:57:49	<TT0__Ken>	the premkt work gives me much Confidence about where I should start looking for an interesting entry for the stock
10/20/01	07:58:17	<TT0__Ken>	let's move on..
10/20/01	07:58:39	<TT0__Ken>	Traders, go ahead and send in any questions you have... we'll answer them in a bit..
10/20/01	07:58:52	<TT0__Ken>	mailto:ken@daytrading-university.com
10/20/01	07:59:29	<TT0__Ken>	we'll have Scott discuss order routing techniques in a few minutes, he's here.. eg at :15 past
10/20/01	08:00:04	<TT0__Ken>	Next tips: overcoming common trading problems..
10/20/01	08:00:19	<TT0__Ken>	one thing traders constantly do is look for the ""next entry""
10/20/01	08:00:24	<TT0__Ken>	on the count of three..
10/20/01	08:00:36	<TT0__Ken>	Everybody say ""that's it, game over I missed it too bad""
10/20/01	08:00:41	<TT0__Ken>	one two three..
10/20/01	08:00:50	<TT0__Ken>	why do I say this?
10/20/01	08:01:04	<TT0__Ken>	because far too many traders miss the first , best run and look for an entry for a continuation
10/20/01	08:01:15	<TT0__Ken>	which simply doesn't occur much the last couple years' market
10/20/01	08:01:28	<TT0__Ken>	if you missed the first entry, then don't overtrade.. you missed it
10/20/01	08:01:30	<TT0__Ken>	deal with it
10/20/01	08:01:44	<TT0__Ken>	and look for a different stock, with emerging chart pattern that looks strong
10/20/01	08:02:00	<TT0__Ken>	often, you need to learn how to correctly enter in the first 1/3 of a stock's major morning move
10/20/01	08:02:16	<TT0__Ken>	so many traders used to ask me ""where's the next KLAC entry, Ken""
10/20/01	08:02:24	<TT0__Ken>	after we nailed a +.8 win or whatever..
10/20/01	08:02:39	<TT0__Ken>	I'd say, ""maybe tomorrow sometime"" lol
10/20/01	08:02:59	<TT0__Ken>	so, you need to be able to jump on the first technical signal for an entry, in your personal trading
10/20/01	08:03:02	<TT0__Ken>	make sense all?
10/20/01	08:03:04	<TT0__Ken>	hope so..
10/20/01	08:03:18	<TT0__Ken>	I used to sit and watch the first big run, and erroneously say to myself
10/20/01	08:03:29	<TT0__Ken>	""gee it just ran up 1 3/4 point, maybe it'll run up some more""
10/20/01	08:03:34	<TT0__Ken>	and buy a consolidation/top
10/20/01	08:03:40	<TT0__Ken>	trying for the ""next move""
10/20/01	08:03:46	<TT0__Ken>	so, I speak from personal experience
10/20/01	08:04:06	<TT0__Ken>	it's better to shift your workload to premkt, and be much Better prepared to enter the first entry
10/20/01	08:04:17	<TT0__Ken>	rather than ambulance chasing for a second or third entry
10/20/01	08:04:30	<TT0__Ken>	if this were 1999, 2nd and 3rd entries were fine, a strong trend market
10/20/01	08:04:45	<TT0__Ken>	2000/01, has been a time of ""if you missed the first one, too bad, because that was it""
10/20/01	08:04:51	<TT0__Ken>	since much more chop
10/20/01	08:05:10	<TT0__Ken>	so, learn that, from today's seminar, as well..
10/20/01	08:05:43	<TT0__Ken>	next point..
10/20/01	08:05:58	<TT0__Ken>	trading problem #2: failure to integrate the signals..
10/20/01	08:06:08	<TT0__Ken>	you need to use what I call a systems approach, an additive approach..
10/20/01	08:06:21	<TT0__Ken>	each data point, gives you a reason for, or reason against (chop) the trade
10/20/01	08:06:41	<TT0__Ken>	so you can't wait for all the planets to align, you had better practice quickly scanning all the data points
10/20/01	08:06:52	<TT0__Ken>	eg trinq value / trend, compq relative to prev day, sector strong/weak etc..
10/20/01	08:07:05	<TT0__Ken>	and zoom in on your stock chart and price action in the tape, in time & sales
10/20/01	08:07:12	<TT0__Ken>	and make a go-no go decision
10/20/01	08:07:33	<TT0__Ken>	Think to yourself, ""how long does it take him to scan all that stuff and make a decision?""
10/20/01	08:07:44	<TT0__Ken>	much like looking at the cockpit of an airplane, all the gauges
10/20/01	08:07:55	<TT0__Ken>	how long, maybe 3-5 seconds max
10/20/01	08:08:04	<TT0__Ken>	more like 3
10/20/01	08:08:35	<TT0__Ken>	you quickly scan over the indicators, and based on your experience, you instantly assess the ""likelihood of followthrough"" for an entry in a specific stock you're watching
10/20/01	08:08:44	<TT0__Ken>	after you do this for a couple of years, it becomes like autopilot
10/20/01	08:08:57	<TT0__Ken>	it's a ""nah chopping around, not too likely, no trade here"" ... or..
10/20/01	08:09:28	<TT0__Ken>	""looks strong, the tape is good, sector making a new high? (yes), trinq staying low? (yes), tape looking like 70%% green or better (yes)"" ok then I put on the trade
10/20/01	08:09:40	<TT0__Ken>	and it's relatively quick..
10/20/01	08:09:45	<TT0__Ken>	we'll cover more later..
10/20/01	08:09:53	<TT0__Ken>	for now, stand up, take a deep breath..
10/20/01	08:10:05	<TT0__Ken>	see how time flies when you're having fun?
10/20/01	08:10:17	<TT0__Ken>	ok next up..
10/20/01	08:10:57	<TT0__Ken>	Special Guest to Daytrading University's Live Seminar: Scott McVicker, former head instructor for Dave Nassar's MarketWise trading school, and runs http://www.Tradecourse.com
10/20/01	08:11:20	<TT0__Ken>	I'd like to welcome Scott, he did a great job at our live Advanced Daytrading Seminar in Anaheim, CA... we had 35 people in attendance..
10/20/01	08:11:31	<TT0__Ken>	he did a lot of good work on order routing specifics, mechanics..
10/20/01	08:11:46	<TT0__Ken>	and I've invited him here today to share some insights with you all on current order routing techniques
10/20/01	08:12:00	<TT0__Ken>	so without further ado, I present Scott to you, he'll be talking for 1/2 hour or so..
10/20/01	08:12:06	<TT0__Ken>	and send in questions, as he speaks..
10/20/01	08:12:12	<TT0__Ken>	Scott, welcome..
10/20/01	08:12:24	<scottc>	Thanks Ken.....
10/20/01	08:12:52	<scottc>	FIrst off, my apologies in advance for bad typing skills...
10/20/01	08:13:06	<scottc>	I am no where near as fast as Ken so bear with me...lol
10/20/01	08:13:45	<scottc>	and also for the mix up on time as I mistakenly thought I was on at 11:30 so if anyone was confused my apology for that as well.
10/20/01	08:13:52	<scottc>	and to Ken...
10/20/01	08:14:04	<scottc>	with that thanks to everone for beint here on a Sat am
10/20/01	08:14:24	<scottc>	shows your committment and that is one of most important trains of a good trader IMO
10/20/01	08:14:37	<TT0__Ken>	yes.. thanks for being here all
10/20/01	08:14:57	<scottc>	I thought it would help if I shared quickly my evolution as a trader as it is very relevant to what I will focus on here today..
10/20/01	08:15:09	<scottc>	I am from the ""old school"" of traders.....
10/20/01	08:15:15	<scottc>	that means I started in 1998 lol
10/20/01	08:15:44	<scottc>	the point is that in 1998 the popular style in DAT trading was to focus on L2 for trade set ups...
10/20/01	08:15:58	<scottc>	Prior to trading I was a financial advisor...
10/20/01	08:16:17	<scottc>	that means I thought you could not time the markets and you should always buy and hold...dollar cost average...
10/20/01	08:16:34	<scottc>	dollar cost average is an industry slang for ""average down""
10/20/01	08:16:53	<scottc>	yes we told people it was smart to add to losing positions....remember we did not trade..!!!
10/20/01	08:17:17	<scottc>	anyway back to my point...I knew nothing about charts and TA
10/20/01	08:17:33	<scottc>	I simply traded from L2 and TS and did it successfully
10/20/01	08:17:39	<scottc>	for awhile!!
10/20/01	08:17:48	<scottc>	then the market changed......bigtime
10/20/01	08:18:27	<scottc>	Now the L2 screen is nothing but a bunch of schitzophrenic (sp?) signals
10/20/01	08:18:41	<scottc>	and to trade off of it alone is insane...
10/20/01	08:19:17	<scottc>	the only way to do it is to make 100-200 trades a day and assume that the law of large numbers will give you a 50/50 ration and cut you losses very short...
10/20/01	08:19:25	<scottc>	a very difficult endeavor indeed.
10/20/01	08:20:03	<scottc>	SO I needed a system to trade from and developed a style that was influenced greatly from what I learned from Ken....
10/20/01	08:20:28	<scottc>	so thanks to Ken for opening thedoor to ""real world"" TA as it has been great for me as a trader...
10/20/01	08:20:57	<scottc>	I say real world because it is applicable...we can use it..
10/20/01	08:21:40	<scottc>	Ok so t=now I have told you where I have come from....how does oreder routing and mechanics impact us as trader espccially in the new world of Super Soes and decimals..
10/20/01	08:22:04	<scottc>	The nice part of how I trade today is that I have a pre-set plan based on Ken's principals...
10/20/01	08:22:15	<scottc>	but what does that mean for me as an order router?
10/20/01	08:22:38	<scottc>	think of it this way, trading low probability set ups is easy from an order routhing perspective...
10/20/01	08:23:05	<scottc>	eg if I am ""buying a bottom"" is it a high %% trader?
10/20/01	08:23:10	<scottc>	trade..
10/20/01	08:23:21	<scottc>	no it is low as who knows if I time it right...
10/20/01	08:23:35	<scottc>	but how hard is it to get filled...I am buying while everyone else is still selling...
10/20/01	08:23:44	<scottc>	its a piece of cake
10/20/01	08:23:53	<scottc>	then the stock goes down further and I have a loss...

 

---

10/20/01	08:24:06	<scottc>	same as fading a rally...
10/20/01	08:24:16	<scottc>	I sell short to the massess that are still buying...
10/20/01	08:24:27	<scottc>	an easy fill but what if they keep coming?
10/20/01	08:24:36	<scottc>	a loss again as the stock moves higher..
10/20/01	08:24:56	<scottc>	when we trade 2 day b/o plays it is the exact opposite and order routing is key
10/20/01	08:25:31	<scottc>	IE when the stock makes a 2dh lots of traders will be looking to go long and you will be competing for the same limited shares for sale....
10/20/01	08:25:38	<scottc>	and opposite when a low is made.
10/20/01	08:26:08	<scottc>	so to summerize remember that trading high %% plays means harder order routing and more skill is required etc.
10/20/01	08:26:52	<scottc>	Before I get into some practical tips...lets make sure everyone understands the BASIC changes of Super SOES as it can be a great tool in the right circumstances and a bad one in the wrong ones...
10/20/01	08:27:46	<scottc>	First off, the main change with SS relates to the interval delay between Soes executions
10/20/01	08:28:15	<scottc>	in old SOES, any MM at the inside was subject to automatic SOES executions up to his displayed volume...
10/20/01	08:28:45	<scottc>	SO if I was BEST and offering 1000 shares at the inside price and a SOES buy order for 500 shares came in...
10/20/01	08:29:07	<scottc>	then it would be autoexecuted against my quote leaving me 500 shares left offered
10/20/01	08:29:25	<scottc>	then one second later another SOES buy order for 500 shares comes in and.................
10/20/01	08:29:49	<scottc>	sits their for 16 seconds as the 17 second interval delay period goes buy
10/20/01	08:30:26	<scottc>	So BEST wants to sell it, a trader wants to buy it...but the execution would be in limbo for the 17 seconds as mandated by the NASDAQ
10/20/01	08:31:00	<DTU__Ken>	great info...useful... thx.. take notes all..
10/20/01	08:31:18	<scottc>	Needless to say, MM's figured out quickly that they could stop momentum buy posting 100 share bids/offers with eg 2000 shares in reserve
10/20/01	08:32:12	<scottc>	So each SOES execution was limited to ther POSTED volume (100 shares) and 17 seconds would go by between each execution before the 100 shares was refreshed with another 100 shares out of the reserve....
10/20/01	08:33:05	<scottc>	This is assuming that only one MM was at the inside by the way. If multiple MMs are at the inside then each incoming SOES order is executed agains the MMs at the inside in rotation based on time priority...
10/20/01	08:33:45	<scottc>	regardless, with the 17 seconds mandated between executions to the same MM, SOES was often back logged with orders in the SOES queue
10/20/01	08:33:55	<scottc>	Now an important side point....
10/20/01	08:34:15	<scottc>	Market makers are subject to whats called the ""firm quote rule""
10/20/01	08:35:02	<scottc>	that means that if they offer 1000 shares in the L2 quote at a certain price, and another market participant decides to match the volume(or lower) and the price (or better) then the MM is obligated to fill it
10/20/01	08:36:07	<scottc>	But remember that SOES is an autoexecution system...that means that the order is transacted automatically (by the Nasdaq) and the MM does not know they have been SOES's until after the fact
10/20/01	08:36:19	<scottc>	Here is what was happening...
10/20/01	08:36:30	<scottc>	A MM would be at the inside offering 1000 shares....
10/20/01	08:37:02	<scottc>	Another Trader would route an order to them via Selectnet preference order at their price and volume
10/20/01	08:37:15	<scottc>	which the MM must fill pursuant to firm quote rule
10/20/01	08:37:46	<scottc>	So they fill it, then a message pops up oin their SOES terminal that states they were just SOES 1000 shares...
10/20/01	08:38:21	<scottc>	SO they end up selling 2000 shares instead of 1000.....and many times they only wnated to sell the 1000
10/20/01	08:38:46	<scottc>	This was referred to as dual liability as both orders were valid and both executed....and MM's hated it
10/20/01	08:39:16	<scottc>	SuperSOes has made dual liability a thing of the past so MM's don't have to worry about it anymore.
10/20/01	08:39:40	<scottc>	At the same time, the Nasdaq has taken away their ability to stall stocks momentum as discussed above
10/20/01	08:39:48	<scottc>	Here is why....
10/20/01	08:40:24	<scottc>	Under Super SOES, the interval delay between executions has gone from 17 seconds to...............
10/20/01	08:40:29	<scottc>	ZERO
10/20/01	08:41:11	<scottc>	Oops I forgot, the Nasdaq says we should allow .7 seconds (yes 7/10th's) of a second for ""system processing""
10/20/01	08:41:39	<scottc>	either way, SOES executions are now instantaneous like ECN executions....
10/20/01	08:41:39	<DTU__Ken>	good advantage..
10/20/01	08:42:03	<scottc>	That is...when you match another ECN ie you take the offer price as a buyer....
10/20/01	08:42:22	<scottc>	it is an instant fill...unless someone else beats you to it by a 100th of a second or what ever..
10/20/01	08:42:29	<scottc>	Now it is the same with SOES
10/20/01	08:43:10	<TT0__Ken>	folks, send in any questions, to mailto:ken@daytrading-university.com
10/20/01	08:43:15	<scottc>	If a MM is at the inside offer at the moment you click your buy SOES button, you will be filled instantly
10/20/01	08:43:19	<TT0__Ken>	have a list of 22 or so thus far, from the session
10/20/01	08:44:07	<scottc>	If he is there, it means no other SOES order is ahead of you because with the 0 second delay, it would already have been filled...
10/20/01	08:44:23	<scottc>	Remember that becuase it is a HUGE difference...
10/20/01	08:44:59	<scottc>	I remember all the time sending SOES orders with 3, 4 5 MM's at the inside, 20 prints go off at the inside price.....
10/20/01	08:45:09	<scottc>	and my order sits there live and unfilled
10/20/01	08:45:29	<scottc>	slowly the MM's would move their prices out of the inside...and I'm still waiting for a fill....
10/20/01	08:45:39	<scottc>	and finallythe last MM pulls and ....
10/20/01	08:45:55	<scottc>	my order is killed since no MM remains at my price...
10/20/01	08:46:02	<scottc>	not anymore..........
10/20/01	08:46:11	<scottc>	IF the MM is there then you will be filled
10/20/01	08:46:19	<scottc>	Another point about SuperSOes.....
10/20/01	08:46:56	<scottc>	executions will occur against reserve volume posted by MM's
10/20/01	08:47:05	<scottc>	directly against reserve volume....
10/20/01	08:47:31	<scottc>	So no more stall tricks whereby their quotes would be refreshed out of hidden reserve....stalling the momentum...
10/20/01	08:47:51	<scottc>	SO BEST offers 1000 shares with 10,000 in reserve.............
10/20/01	08:48:14	<scottc>	ANd 11 SOES buy orders come in at the inside price...
10/20/01	08:48:50	<scottc>	Under Old SOES each order would take 17 seconds between it and the next one as 1000 shares would be refreshed at the end of the 17 seconds out of the 10,000 reserve...
10/20/01	08:49:16	<scottc>	Under SS all 11 orders are filled virtually instantaneously against the quoted 1000 shares and the 10,000 in reserve....
10/20/01	08:49:24	<scottc>	No more SOES queue to wait in...
10/20/01	08:49:29	<TT0__Ken>	good info scott, appreciate it... any other tips for everyone ?
10/20/01	08:49:50	<TT0__Ken>	we're going to be doing trader Q&A next, so email with any questions for me and scott now.. thx..
10/20/01	08:50:10	<scottc>	SO in summary, If the MM or MM's are there you can SOES and get an instant fill......if they are not then don't bother SOESing!!!!
10/20/01	08:50:51	<scottc>	I look at SOES like an ECN now...if ISLD is there I nail it...if ARCA is there same thing...if a MM is there I nail them via soes and it works!!
10/20/01	08:51:07	<scottc>	One final point on SS ....
10/20/01	08:51:13	<scottc>	a common misconception...........
10/20/01	08:51:44	<scottc>	THere is no need to price your order at the inside price when using SOES.....
10/20/01	08:52:18	<scottc>	ALl SOES orders are transacted at the inside price when your order is next up...whatever that price is...
10/20/01	08:53:01	<scottc>	SO if you routed a SOES order 5 cents above the inside offer....but your order was the next one up (no orders ahead) then you get filled at the current inside (better) price
10/20/01	08:53:29	<scottc>	The benefit is simply this....If you route the order at the inside price but then the MM pulls at that same time...
10/20/01	08:53:38	<scottc>	your order is killed by the NAZ....
10/20/01	08:53:54	<scottc>	so you reenter it at the next price level where the same MM just moved to...
10/20/01	08:54:14	<scottc>	but meanwhile 20 other traders entered orders a second ahead of your new revised order...
10/20/01	08:54:22	<scottc>	you just got moved to the back of the line..
10/20/01	08:54:58	<scottc>	its like moving from one line at the grocery store to another because the lady in front of you has a zillion things...
10/20/01	08:55:09	<scottc>	and the line next to you the guy only has a few....
10/20/01	08:55:31	<DTU__Ken>	good points..
10/20/01	08:55:35	<scottc>	so you jump out of one line to the other just as you hear the guy in the other line say ""can I see you manager pleae""
10/20/01	08:55:47	<scottc>	so you move back to the other line and your at the end...
10/20/01	08:55:51	<scottc>	dont play that game
10/20/01	08:55:57	<DTU__Ken>	lol
10/20/01	08:56:07	<scottc>	Thankds everyone for your attention today>>>
10/20/01	08:56:42	<DTU__Ken>	Scott, many thanks for sharing your expertise in order routing techniques, valuable stuff
10/20/01	08:56:58	<DTU__Ken>	it's an important piece of the puzzle that many traders never grasp
10/20/01	08:57:05	<DTU__Ken>	and yet, is important to success
10/20/01	08:57:16	<scottc>	Ken, I would like to post a link to a summary on SOES and SHorting techniques if that is OK...as I did not get to a few points.....
10/20/01	08:57:33	<DTU__Ken>	Ok traders, if you have any questions, please email me, I'll post them here
10/20/01	08:57:35	<DTU__Ken>	sure..
10/20/01	08:57:39	<scottc>	www.tradecourse.com/course/supersoes_introduction.swf
10/20/01	08:57:51	<scottc>	www.tradecourse.com/course/soes_examples.swf
10/20/01	08:57:54	<DTU__Ken>	scott has some good animated info on how order routing works..
10/20/01	08:58:04	<scottc>	www.tradecourse.com/course/shorting_execution.swf
10/20/01	08:58:27	<scottc>	Each of these modules is part of the DAT course we have on the Tradecourse site.....
10/20/01	08:58:56	<DTU__Ken>	yes.. I endorse scott's teaching (and no I get nothing for doing that :) because he knows what he's talking about
10/20/01	08:59:05	<scottc>	it requires a user and password which I have set up as ""dtu"" and ""dtu""
10/20/01	08:59:15	<DTU__Ken>	scott's on the 'short list' of people I find credible in the industry, dave nassar vouches for him etc
10/20/01	08:59:37	<scottc>	I have enabled it for todays attendees so take a look today and I hop it helps.....thanks again everyone...
10/20/01	09:00:08	<scottc>	wow my hands really hurt
10/20/01	09:00:11	<DTU__Ken>	Scott, many thanks for being here today - excellent info as usual. The ""mechanics of the trade"" stuff, I like that
10/20/01	09:00:27	<DTU__Ken>	the nuts n bolts, you all need to know how it works etc..
10/20/01	09:00:30	<DTU__Ken>	lol
10/20/01	09:00:44	<DTU__Ken>	know you know how I feel, after doing this for the past year.. :) in the live room
10/20/01	09:00:53	<DTU__Ken>	but as long as people learn, that's helpful
10/20/01	09:00:56	<scottc>	I can't imagine
10/20/01	09:01:13	<DTU__Ken>	thats one reason i took two months off, so i dont get carpal tunnel etc
10/20/01	09:01:18	<DTU__Ken>	ok, let's do Q&A
10/20/01	09:01:29	<DTU__Ken>	a round of applause for scott (^_^)
10/20/01	09:01:52	<DTU__Ken>	and, we do trader questions for the next 30-40 minutes, then on to swing trading
10/20/01	09:02:03	<DTU__Ken>	excellent questions, too everyone...
10/20/01	09:02:32	<DTU__Ken>	I've cut n pasted them from your emails, in order of receiving them..
10/20/01	09:02:56	<DTU__Ken>	Q1: when do you use closed line chart?
10/20/01	09:03:17	<DTU__Ken>	A: I use close line 1min charts for my ""thumbnail"" charts, to spot early moves, and for all market indicators
10/20/01	09:03:29	<DTU__Ken>	I use candlesticks for my big closeup charts, to nail exact entries
10/20/01	09:03:51	<DTU__Ken>	http://www.Daytrading-University.com/!!6mon.gif
10/20/01	09:04:13	<DTU__Ken>	rationale: I found that having several dozen bar/candle charts is ""too busy"", not as clean
10/20/01	09:04:24	<DTU__Ken>	so I can spot reversals faster w/close line charts
10/20/01	09:04:37	<DTU__Ken>	Q2:Time & Sales - I use ISLAND (freeb sw) is this what you mean by T&S, if not, what specifically can we use for T&S and where can we get it here can we get ahold of the Futures data?
10/20/01	09:04:51	<DTU__Ken>	A: no, You MUST have time & sales and level 2 to daytrade
10/20/01	09:05:22	<DTU__Ken>	posting an example..
10/20/01	09:05:36	<DTU__Ken>	here's a big time & sales screen I use, a superb closeup
10/20/01	09:05:50	<DTU__Ken>	and you can get details on how I use it, with a live trading situation, in the advanced daytrading video
10/20/01	09:06:12	<DTU__Ken>	http://www.daytrading-university.com/amatts.gif
10/20/01	09:06:24	<DTU__Ken>	you can see, one thing I pay attention to, is the far right column, the inside size
10/20/01	09:06:33	<DTU__Ken>	eg you'll see 46x20 on the upper right
10/20/01	09:06:43	<DTU__Ken>	look at bid/ask ratios, pressure in the tape
10/20/01	09:07:01	<DTU__Ken>	this second question goes back to my Frustration at seeing people not treat trading like a business
10/20/01	09:07:08	<DTU__Ken>	you need to get realtick or esignal
10/20/01	09:07:13	<DTU__Ken>	I like esignal myself
10/20/01	09:07:29	<DTU__Ken>	but hey, try them both out, see which is best for you, they're the two top ones
10/20/01	09:07:34	<DTU__Ken>	ask any professional trader
10/20/01	09:07:58	<DTU__Ken>	same thing re futures data, need cME feed, or use the eminis etc, w/professional data feed
10/20/01	09:08:21	<DTU__Ken>	if you can't afford the basics, like a multimonitor setup, dat broker commisshes, and a data feed, then you are in the Wrong Place..
10/20/01	09:08:37	<DTU__Ken>	Daytrading is a profession, for well-equipped , hard working men and women, who expect to make a living at this
10/20/01	09:08:51	<DTU__Ken>	not a place for people who want to economize and try to get by with cheapie stuff..
10/20/01	09:09:03	<DTU__Ken>	the total cost is higher, because I'll outtrade you with my rig, as will other pros
10/20/01	09:09:08	<DTU__Ken>	and you end up losing..
10/20/01	09:09:21	<DTU__Ken>	so , get professional equipment, I dont care who, just get the best you can
10/20/01	09:09:23	<DTU__Ken>	ok next
10/20/01	09:09:51	<DTU__Ken>	Q:in your quote box explain why you use percent from open verses percent from previous close.
10/20/01	09:10:07	<DTU__Ken>	this was on one of my traders' questions/ideas late last year..
10/20/01	09:10:28	<DTU__Ken>	I found that the percent from open is more relevant to intraday trading , a bit better of an indicator, because it shows
10/20/01	09:10:44	<DTU__Ken>	the Net change from the open, more of an intraday indicator, then the percent from yesterday's close
10/20/01	09:10:53	<DTU__Ken>	I used to use %% from yest close for years.. both are fine
10/20/01	09:11:16	<DTU__Ken>	I just found that the percent from open gave a bit better performance, more accurate indicator of intraday 'net' movement
10/20/01	09:11:30	<DTU__Ken>	Q: Are trin and trinq identical, or if different, what differentiates them?
10/20/01	09:11:44	<DTU__Ken>	no they arent, the trin is the NYSE trin, the TRINQ is the Nasdaq trin..
10/20/01	09:11:53	<DTU__Ken>	you must have the nasdaq trin to daytrade nasdaq stocks
10/20/01	09:12:01	<DTU__Ken>	why would you use the spoos to daytrade AMAT?
10/20/01	09:12:08	<DTU__Ken>	example, of a mismatched indicator
10/20/01	09:12:14	<DTU__Ken>	the spoos are the s&p futures..
10/20/01	09:12:25	<DTU__Ken>	they are great, for s&p basket for trading
10/20/01	09:12:29	<DTU__Ken>	not for nasdaq
10/20/01	09:12:44	<DTU__Ken>	so, you must have the nasdaq trin to daytrade nasdaq stocks, I would not want to daytrade without it
10/20/01	09:12:59	<DTU__Ken>	I find it more powerful, more valuable , than the nas futs...
10/20/01	09:13:13	<DTU__Ken>	the nas futs are ok as an oscillator type indicator, somewhat helpful
10/20/01	09:13:29	<DTU__Ken>	but I make trading decisions using the TRINQ as a heavy weighting factor
10/20/01	09:13:55	<DTU__Ken>	q: *What should those who now have under 25k on their accounts do?
10/20/01	09:14:15	<DTU__Ken>	I don't know, get a day job?
10/20/01	09:14:16	<DTU__Ken>	LOL
10/20/01	09:14:30	<DTU__Ken>	seriously..
10/20/01	09:14:44	<DTU__Ken>	you can either swing trade, or do very limited daytrading, not really the answer though
10/20/01	09:15:00	<DTU__Ken>	people have talked about trading individual stop futures/options, whatever.. thats Bullshit
10/20/01	09:15:18	<_vince63>	what is the trade limit with < 25k?
10/20/01	09:15:19	<DTU__Ken>	daytrading requires capital enough for you to absorb a learning curve without getting taken out of the game
10/20/01	09:15:38	<DTU__Ken>	like any small business, and like my personal experience, you will probably do breakeven/losing trading the first 18 to 24 months
10/20/01	09:15:50	<DTU__Ken>	so you preserve capital, ""daytrade light"", eg 100 share trades etc
10/20/01	09:16:02	<DTU__Ken>	but you still need the proper tools and capital to daytrade
10/20/01	09:16:08	<DTU__Ken>	personally, I think 25K is a bit high
10/20/01	09:16:16	<DTU__Ken>	I would've like to see 10K as the minimum
10/20/01	09:16:24	<DTU__Ken>	did you know the Senate wanted it to be 50K?
10/20/01	09:16:34	<DTU__Ken>	there's a couple .pdf files at the nasdaqmarket.com site on it..
10/20/01	09:17:08	<DTU__Ken>	so, make a decision for yourself as to what type of trading suits you best
10/20/01	09:17:25	<DTU__Ken>	defaulting to swing trading has wiped out many billions of trader dollars this past two years
10/20/01	09:17:29	<DTU__Ken>	so think carefully about that
10/20/01	09:17:39	<DTU__Ken>	you are exposed to gap down opens, for long swings
10/20/01	09:17:55	<DTU__Ken>	and personally, I am not going to start swing trading heavy til the COMPQ regains 2200 or so
10/20/01	09:18:01	<DTU__Ken>	which at this rate will be next year lol
10/20/01	09:18:06	<DTU__Ken>	next..
10/20/01	09:18:17	<DTU__Ken>	Q: Do breakouts usually test their pivot/brkout point
10/20/01	09:18:21	<DTU__Ken>	excellent question..
10/20/01	09:18:34	<DTU__Ken>	I like to see a stock consolidate or make a cup pattern prior to breaking out..
10/20/01	09:18:40	<DTU__Ken>	scanning for an example here..
10/20/01	09:18:49	<DTU__Ken>	we want to avoid false breakouts/double tops, chop
10/20/01	09:18:56	<scottc>	look at SYMC yesterday
10/20/01	09:19:02	<DTU__Ken>	so you need to know how to read the tape..
10/20/01	09:19:16	<DTU__Ken>	yes, good example w/two cup breakouts..
10/20/01	09:19:50	<DTU__Ken>	posting it...
10/20/01	09:20:09	<DTU__Ken>	actually 3 cup breakouts total, the two on the right are the strongest, posting..
10/20/01	09:20:29	<DTU__Ken>	http://www.Daytrading-University.com/symcoct19.gif
10/20/01	09:21:11	<DTU__Ken>	you can see the first one at 10:20, over 51.5+, second at 1pm, over 52.3+, third at 3:10pm, over 53.5+
10/20/01	09:21:35	<DTU__Ken>	now, scott just mentioned that and I instantly was able to pull it up, draw the breakouts, annotate and post it
10/20/01	09:21:43	<DTU__Ken>	and post commentary within a few seconds..
10/20/01	09:21:55	<DTU__Ken>	and I wasn't expecting his comment :lol:
10/20/01	09:22:01	<DTU__Ken>	so the point is, my reflexes are FAST..
10/20/01	09:22:07	<DTU__Ken>	and yours need to be as well, to succeed
10/20/01	09:22:27	<DTU__Ken>	you all need to be able to react quickly to data points as they come up on your radar screen..
10/20/01	09:22:37	<DTU__Ken>	hopefully everyone can see the 3 cups in this chart, yes?
10/20/01	09:22:42	<DTU__Ken>	ok.. next question
10/20/01	09:22:53	<DTU__Ken>	Q: I would like to know how you select the stocks , you will be trading , if you wait too see which sectors will be the stronger of the day ? does the premarket tell you that ? . news ?
10/20/01	09:23:16	<DTU__Ken>	yes, I use the sectors from the open, I'm scanning to see which ones are the strongest/weakest
10/20/01	09:23:29	<DTU__Ken>	for those who've been in the live trading room, you know I am regularly posting things like..
10/20/01	09:23:44	<DTU__Ken>	Sector Watch: ok traders, which sectors are strongest/weakest right now? chart patterns?
10/20/01	09:23:58	<DTU__Ken>	and we train together, to scan these, and use the strongest sector to id stocks to enter
10/20/01	09:24:07	<DTU__Ken>	premarket, yes..
10/20/01	09:24:59	<DTU__Ken>	for example, yesterday I had posted premkt gaps in PSFT EBAY to follow
10/20/01	09:25:10	<DTU__Ken>	you need premarket charts, to see gaps etc
10/20/01	09:25:19	<DTU__Ken>	I do not use news, other than to trade the charts that news produces
10/20/01	09:25:43	<DTU__Ken>	eg EBAY misses earnings estimate, or makes it , or whatever, all I care about is trading the chart pattern
10/20/01	09:25:52	<DTU__Ken>	never try to infer future direction of a stock based on new
10/20/01	09:25:54	<DTU__Ken>	news
10/20/01	09:26:03	<DTU__Ken>	never.. all that matters is the chart, and the 'type of day it is'
10/20/01	09:26:14	<DTU__Ken>	Q: Do you use 'fair value' as a leading indicator, and if so, how do you track it?
10/20/01	09:26:15	<DTU__Ken>	no
10/20/01	09:26:34	<DTU__Ken>	i do, however, watch cnbc prior to 9:30am, at 9:30, the tv goes off
10/20/01	09:26:52	<DTU__Ken>	the much-vaulted ""joe kernan effect"" was true
10/20/01	09:26:55	<DTU__Ken>	in 1998
10/20/01	09:26:59	<DTU__Ken>	and early 1999
10/20/01	09:27:05	<DTU__Ken>	now cnbc is totally useless to me
10/20/01	09:27:28	<DTU__Ken>	I will keep it rambling in the premkt just in case there's strong news on something who's chart I will pull up
10/20/01	09:27:41	<DTU__Ken>	and I keep an eye on the nas futs trend that they post
10/20/01	09:27:46	<DTU__Ken>	but it's minimally useful..
10/20/01	09:27:59	<DTU__Ken>	how do you determine whether to use the .3 or .6 above the whole number?
10/20/01	09:28:14	<DTU__Ken>	that's a measure of my skepticism on the entry's likelihood of followthrough
10/20/01	09:28:28	<DTU__Ken>	if say the previous day's high EBAY is 52.5...
10/20/01	09:28:37	<DTU__Ken>	and I am setting an alert today, lets say premkt hasnt gapped
10/20/01	09:28:55	<DTU__Ken>	then the possibility is, long EBAY if it clears 53.3+ to 53.6+ in the current session
10/20/01	09:29:15	<DTU__Ken>	the determination of that, is usually adjusted realtime based on the GIN and TRINQ etc, as well as the tape and chart pattern in ebay
10/20/01	09:29:28	<DTU__Ken>	so, I make it jump through a higher hurdle if there's a red flag
10/20/01	09:29:35	<DTU__Ken>	like, it's ran straight up to near the alert..
10/20/01	09:29:47	<DTU__Ken>	I'll want to see a test of sellers, an initial pullback, then a followthrough
10/20/01	09:29:58	<DTU__Ken>	Q: where can I find a whole list of the most important sector tier stocks 1 + 2
10/20/01	09:30:05	<DTU__Ken>	http://www.daytrading-university.com/faq.htm
10/20/01	09:30:08	<DTU__Ken>	has a very long list..
10/20/01	09:30:24	<DTU__Ken>	see the current transcript link , the premkt alerts, to get an idea of the stocks we're following now
10/20/01	09:30:32	<TT0__Ken>	http://www.Daytrading-University.com/livetranscriptOct08_01.htm
10/20/01	09:30:50	<DTU__Ken>	that has premkt alerts for stocks grouped by sector that are currently ""in motion""
10/20/01	09:31:07	<DTU__Ken>	Q: sometimes you set an alert very close above the past day's high, and sometimes you use a much wider setup above the day's high, do you use the NASDAQ closing price of yesterday for your initialy setups maybe?
10/20/01	09:31:16	<DTU__Ken>	good question..
10/20/01	09:31:35	<DTU__Ken>	the COMPQ I use to help adjust an entry based on whether it's a wide range or narrow range day
10/20/01	09:32:00	<DTU__Ken>	I will set the alert closer, if we're near an ""edge"", eg a short if the COMPQ is testing the low of the prev day, a long if testing the prev days high
10/20/01	09:32:11	<DTU__Ken>	Q: you say you dont use stochastics to guage a trade entry, yet you use stoch's for exits...why ?
10/20/01	09:32:35	<DTU__Ken>	because I tried out a live room that had a bunch of ""noodles crank"" bullshit and .2 to .4 wins and an op that said ""weee""
10/20/01	09:32:40	<DTU__Ken>	and besides, it doesnt work
10/20/01	09:32:41	<DTU__Ken>	LOL
10/20/01	09:32:49	<DTU__Ken>	this was a few years back.. :)
10/20/01	09:32:59	<DTU__Ken>	I tried all the rooms out there, I wasn't happy with what I saw..
10/20/01	09:33:23	<DTU__Ken>	and I'm not saying I'm a guru or anything, but hopefully, you can tell by the intelligence and detail I post, that I am somewhat knowledgeable
10/20/01	09:33:34	<DTU__Ken>	it's the result of a lot of experimentation
10/20/01	09:33:48	<DTU__Ken>	the rationale for no stochastic entries is ""Too many false positives""
10/20/01	09:33:57	<DTU__Ken>	I can quickly scan for multiple examples..
10/20/01	09:35:09	<DTU__Ken>	while I do, let's do more q&a..
10/20/01	09:35:23	<DTU__Ken>	Q: There are a lot of chart patterns out there in daytrading, most of them are only profitable 50%% of the time ... Which chartpatterns have the highest probability in your opinion ? How do you trade them ?
10/20/01	09:35:43	<DTU__Ken>	I trade breakouts 80%% of the time, this requires a lot of personal discipline and patience on my part
10/20/01	09:36:08	<DTU__Ken>	you can be right 50%% of the time and be hugely profitable, you just need to have smaller stops + commish load than wins..
10/20/01	09:36:13	<DTU__Ken>	and that's the trick, isn't it?
10/20/01	09:36:32	<DTU__Ken>	the key is being selective in entries, and being prepared with alerts you think should show the best followthrough
10/20/01	09:36:45	<DTU__Ken>	and use the market indicators correctly, eg nasdaq trin, sector charts , compq etc
10/20/01	09:37:34	<DTU__Ken>	next..
10/20/01	09:38:08	<DTU__Ken>	""why do you place your stop at the whole number and not just below the whole number? Say, i would enter(long breakout) a stock at 38.3, my stop loss would be 38, and why not 37.9 or 37.95? Frequently I see the stock bounce back at the whole number.""
10/20/01	09:38:37	<DTU__Ken>	this can be fine too of course, frequently I will stop out at the original entry, to minimize stop loss..
10/20/01	09:38:53	<DTU__Ken>	eg it goes through an alert at 36.3 and gets to 36.7, then starts to head south on me..
10/20/01	09:39:13	<DTU__Ken>	we're in a narrow range day, I'm not too enthusiastic about the market's strength, so I stop out if it gets back to the 36.3
10/20/01	09:39:18	<DTU__Ken>	out even - commish
10/20/01	09:39:30	<DTU__Ken>	much less, waiting for a 36 or 35.9 or whatever..
10/20/01	09:39:42	<DTU__Ken>	the answer is, look at the previous day's high..
10/20/01	09:39:47	<DTU__Ken>	and how close the alert is to it.
10/20/01	09:39:57	<DTU__Ken>	and whether there's a cup/consolidation pattern ""supporting"" the breakout,
10/20/01	09:40:11	<DTU__Ken>	or if it's a thin run up through an alert, in which case you'd be out faster..
10/20/01	09:40:24	<DTU__Ken>	let's say it gets past 36.3, you get a fill at 36.45.. it goes up..
10/20/01	09:40:33	<DTU__Ken>	it's 36.65... still buyers, t&s looks green
10/20/01	09:40:45	<DTU__Ken>	and now you see it's sector, say the $SOX, is climbing to a new high
10/20/01	09:40:46	<DTU__Ken>	great..
10/20/01	09:40:59	<DTU__Ken>	so it keeps headed up, say 36.85..
10/20/01	09:41:02	<DTU__Ken>	36.91..
10/20/01	09:41:12	<DTU__Ken>	you now trail a stop back at the red level in L2, eg at 36.75
10/20/01	09:41:23	<DTU__Ken>	..it chops a bit at the 37, tries to break out..
10/20/01	09:41:30	<DTU__Ken>	does a bit, gets to 37.05..
10/20/01	09:41:44	<DTU__Ken>	you trail stop at 36.95 here
10/20/01	09:42:01	<DTU__Ken>	it's at 37.15, and now you see a stochastic crossover ,eg it starts to lose 90%%/80%%
10/20/01	09:42:08	<DTU__Ken>	and you see a little red doji candle
10/20/01	09:42:15	<DTU__Ken>	and the tape starts to get 50/50ish
10/20/01	09:42:24	<DTU__Ken>	and it's back down to 37.05..
10/20/01	09:42:27	<DTU__Ken>	what do you do?
10/20/01	09:42:33	<DTU__Ken>	ummm, one hint..
10/20/01	09:42:35	<DTU__Ken>	SELL
10/20/01	09:42:46	<DTU__Ken>	take the .7 and be happy, that's it game over
10/20/01	09:43:15	<DTU__Ken>	if you're really good, and you see the futs plummet etc, then put a reversal short on if it starts to lose say 36.8.. with a trailing cover stop at the 37
10/20/01	09:43:37	<DTU__Ken>	and do what I call ""play both sides of the mountain""... which is for 3-4yr + experienced traders only by the way :)
10/20/01	09:43:55	<DTU__Ken>	in general, the main point is to keep a close trailing stop on the way up, and be out when the tape reverses on you

 

 

10/20/01	09:44:47	<DTU__Ken>	next trader question...
10/20/01	09:45:19	<DTU__Ken>	Can you cover a bit more on utilizing volume for entry and exits and that relationship.
10/20/01	09:45:22	<DTU__Ken>	sure why not..
10/20/01	09:45:59	<DTU__Ken>	for daytrading, we're looking at the tape and spotting when a pivot occurs on heavier volume than we saw on the initial move..
10/20/01	09:46:32	<DTU__Ken>	so you are watching the tape.. and you look for size and speed in the initial move
10/20/01	09:46:52	<DTU__Ken>	lets say the tape on the way down is printing at a given speed, it's slowing down, it pauses..
10/20/01	09:47:08	<DTU__Ken>	you look at your 1minute candlestick chart, take a mental note quickly of the volume bars... their size
10/20/01	09:47:39	<DTU__Ken>	as the tape slows, and you start to see trades go off in both directions, eg xmas tree, red n green, you start to look for volume on a reversal
10/20/01	09:48:01	<DTU__Ken>	you Only try a pivot trade if the volume following the reversal is heavier than it was on the way down..
10/20/01	09:48:14	<DTU__Ken>	otherwise, you are just getting in with short covers, and it will likely chop n drop some more..
10/20/01	09:48:16	<DTU__Ken>	so ,a pro tip
10/20/01	09:48:19	<DTU__Ken>	next..
10/20/01	09:48:34	<DTU__Ken>	Q: If you can speak to psychological fear of hitting the buy/short button.?
10/20/01	09:48:37	<DTU__Ken>	no
10/20/01	09:48:41	<DTU__Ken>	dont be a wuss
10/20/01	09:48:50	<DTU__Ken>	sorry, I'm a businessman... I'm a trader..
10/20/01	09:48:56	<DTU__Ken>	if you're afraid to trade, then don't trade
10/20/01	09:49:03	<DTU__Ken>	some people aren't cut out for trading
10/20/01	09:49:10	<DTU__Ken>	try it out for a year or two..
10/20/01	09:49:26	<DTU__Ken>	if you're still getting traders' block.. then you're not doing your TA work....
10/20/01	09:49:33	<DTU__Ken>	you need to have a Reason to put on any trade, right?
10/20/01	09:49:49	<DTU__Ken>	if you know ahead of time what to look for, and why.. it makes firing off the trade much easier..
10/20/01	09:50:34	<DTU__Ken>	Trader's Tip #502: Before each trade, imagine you have the head trader from MLCO looking over your shoulder. You should be able to 'defend your trade', eg explain what technical signals you saw that justified an entry.
10/20/01	09:51:08	<DTU__Ken>	if all you can say is ""gee some guy in a chatroom said ""urgent buy CIEN consider Buy it it's running noodles crank uptick who's your daddy?"",
10/20/01	09:51:10	<DTU__Ken>	you are
10/20/01	09:51:13	<DTU__Ken>	Fired
10/20/01	09:51:15	<DTU__Ken>	LOL
10/20/01	09:51:32	<DTU__Ken>	you need to have the integrity, the work ethic, and the skill, to understand your own trades
10/20/01	09:52:01	<DTU__Ken>	if you can say ""I bought EMLX yesterday on a 2day high breakout because the COMPQ and NBI were making new highs and the tape was 70%% green""...
10/20/01	09:52:04	<DTU__Ken>	you are
10/20/01	09:52:08	<DTU__Ken>	On the right path :)
10/20/01	09:52:17	<DTU__Ken>	hope that makes sense folks...
10/20/01	09:52:23	<DTU__Ken>	trading is a business, and requires work
10/20/01	09:52:40	<DTU__Ken>	many people want to trade cheap stocks and do momentum gambling... they Lose
10/20/01	09:53:02	<DTU__Ken>	professionals carefully work hard, and have discipline and an intense interest, a passion for it
10/20/01	09:53:36	<DTU__Ken>	I love nailing good trades, and sure I get annoyed when I take a small stop, but it's no big deal.. overall, you expect to be net profitable at this
10/20/01	09:53:42	<DTU__Ken>	and there's a looong learning curve
10/20/01	09:53:53	<DTU__Ken>	most people are too lazy to daytrade correctly, and wash out
10/20/01	09:53:55	<DTU__Ken>	don't go there
10/20/01	09:53:58	<DTU__Ken>	next question.
10/20/01	09:54:11	<DTU__Ken>	I use e-signal along with other traders in this seminar. Do you have any Excel link (DDE) pages that you use and are willing to share with us.
10/20/01	09:54:27	<DTU__Ken>	sure I used to .zip my layout files, I'll do this again and email everyone with the link later this month
10/20/01	09:54:43	<DTU__Ken>	Q: How do you look at gap moves that continue in the same direction and are beyond the two day high low? most traders fade the gaps as a higher percentage open trade -- your thoughts on gap trading the open .
10/20/01	09:54:52	<DTU__Ken>	use the patterns..
10/20/01	09:55:02	<DTU__Ken>	usually I am more conservative on gap continuations..
10/20/01	09:55:21	<DTU__Ken>	but we shorted the heck out of EBAY yesterday in the live room
10/20/01	09:55:31	<DTU__Ken>	a nice gap down continuation play.. confirmed by weak GIN etc
10/20/01	09:55:52	<DTU__Ken>	and we went long EMLX on continuation strength (no gap tho)
10/20/01	09:56:08	<DTU__Ken>	we set alerts for PSFT gap up, but it traded mostly in a tight range, so no entry
10/20/01	09:56:31	<DTU__Ken>	the key is, set technical fences around the stock's current trading range, so you are prepared ahead of time to enter once the range is penetrated
10/20/01	09:56:38	<DTU__Ken>	next..
10/20/01	09:56:50	<DTU__Ken>	a quick point re stochastics.. here's an example
10/20/01	09:57:52	<DTU__Ken>	http://www.Daytrading-University.com/idphoct19.gif
10/20/01	09:58:03	<DTU__Ken>	you can see that using stochastic crossovers for an entry is Not correct
10/20/01	09:58:27	<DTU__Ken>	eg, it has 10/20 band crossovers at 10am and 10:18 am, neither would have produced a correct long entry
10/20/01	09:58:37	<DTU__Ken>	so, ignore people who say noodles stochastic bounce wee
10/20/01	09:58:41	<DTU__Ken>	they are full o it
10/20/01	09:58:43	<DTU__Ken>	next..
10/20/01	09:59:04	<DTU__Ken>	Q: Seems to me a person could read the CBS analyst and go in the opposite direction and hit a good pct. Is this a mm game or is my perception way off base
10/20/01	09:59:23	<DTU__Ken>	lol.. qood q.. I totally ignore the talking heads..
10/20/01	09:59:33	<DTU__Ken>	all that matters to me is what's Measurable and Specific
10/20/01	09:59:38	<DTU__Ken>	and Actionable..
10/20/01	09:59:56	<DTU__Ken>	like that set SMART goals corporate acronym we used to use at Ford & Rockwell..
10/20/01	10:00:10	<DTU__Ken>	specific, measurable, actionable, realistic, time-bounded
10/20/01	10:00:16	<DTU__Ken>	good rules for trading..
10/20/01	10:00:24	<DTU__Ken>	people talking on tv mean Zip to me..
10/20/01	10:00:40	<DTU__Ken>	all I care about is market internals, price elasticity, time & sales, the average intraday trading range
10/20/01	10:00:50	<DTU__Ken>	and price movement relative to the sectors, trinq and futs
10/20/01	10:00:59	<DTU__Ken>	we use all these things to make a case for a trade entry
10/20/01	10:01:01	<DTU__Ken>	or exit
10/20/01	10:01:15	<DTU__Ken>	Q: (1) With regards to the brcd example earlier on average moves & lenght of time in moves can we simply use the 2 day chart to identify these or would we have to know the average moves times etc for all the stocks we watch off hand?
10/20/01	10:01:30	<DTU__Ken>	look at several recent days of a stock's price action
10/20/01	10:01:45	<DTU__Ken>	note the support and resistance areas, and ""how long it moves before a pullback, on average""..
10/20/01	10:01:50	<DTU__Ken>	and what the average daily trading range is
10/20/01	10:02:02	<DTU__Ken>	and any time-of-day effects , if any, that are robust to the compq
10/20/01	10:02:19	<DTU__Ken>	eg does KLAC move more in the late or early morning, is it an ""afternoon mover"", etc..
10/20/01	10:02:35	<DTU__Ken>	time of day, less important on a per stock basis, but still good to scan for
10/20/01	10:02:48	<DTU__Ken>	Q: When looking for volume reversal to you play more attention to the volume on the 1/2 day chart or just volume compared to previous session or use both?
10/20/01	10:03:18	<DTU__Ken>	excellent question... a higher volume today, esp. premkt, on the open , compared to previous day, is a good initial trigger point
10/20/01	10:03:26	<DTU__Ken>	since it will show up in scanners
10/20/01	10:03:43	<DTU__Ken>	in terms of timing the exact entry though, you are ""all eyes"" to the volume you see printing on the tape in the current day
10/20/01	10:04:11	<DTU__Ken>	so, prev day to catch your attention that something's different, worth looking at for a trade.. current day (eg 1/2d chart), for timing exact entry today
10/20/01	10:04:31	<DTU__Ken>	Q I set my alerts at bid high at .10 above whole number say 40.10 and the bid low at the whole number same with the ask high and ask low is this what you do?
10/20/01	10:04:39	<DTU__Ken>	I set the alerts at the whole number itself..
10/20/01	10:05:05	<DTU__Ken>	eg if yesterday's high was 30.6.. and today's initial long alert is 31.5, I'll have the software alert me once the stock is bid up to 31 even
10/20/01	10:05:18	<DTU__Ken>	Q: Do you look at any indicators that are more long-term to determine if the overall market or market sectors is switching from ""choppy"" to ""trending"" - or do you just take it 2 days at a time? what, if anything, would make you consider going back to swing trading?
10/20/01	10:05:40	<DTU__Ken>	absolutely, I pay close attention to 10day chart data for swing entries and for price history
10/20/01	10:05:53	<DTU__Ken>	10days back is an eternity to me, as a daytrader
10/20/01	10:06:20	<DTU__Ken>	when I'm wearing my swing trading hat, I use 10days, also I will look closely at 20/50/100/200 MA crossovers on as far back as 3-6 month charts
10/20/01	10:06:31	<DTU__Ken>	to see key support/res lines that attract inst. money flow
10/20/01	10:06:46	<DTU__Ken>	from a daytrading perspective though, just the previous and current day are all that's most important
10/20/01	10:07:06	<DTU__Ken>	q : Do you cosider any length of time for a consolidation area to be significant, a brief consolidation on a 2 day or extended consolidation?
10/20/01	10:07:29	<DTU__Ken>	the only consolidation area I look at for daytrades, is say 3-5 minutes near a prev support/res line area
10/20/01	10:07:42	<DTU__Ken>	I like to see a small congestion area, or an ascending triangle..
10/20/01	10:08:15	<DTU__Ken>	those take awhile, EMLX yesterday is a classic example
10/20/01	10:09:08	<DTU__Ken>	posting a second annotated chart example..
10/20/01	10:09:37	<DTU__Ken>	everyone please see http://www.Daytrading-University.com/emlxoct19ss.gif
10/20/01	10:09:50	<DTU__Ken>	can you all see why I said ""long trigger at 22.6""?
10/20/01	10:10:02	<DTU__Ken>	what's important is, I posted that alert, the 22.65+, at 10:30 am
10/20/01	10:10:19	<DTU__Ken>	you should all be able to see the ascending triangle with a 2-day high breakout
10/20/01	10:10:26	<DTU__Ken>	22.5 the resistance
10/20/01	10:11:03	<DTU__Ken>	a lot of strong stock price happens premarket or after market. Does it make sense to concentrate only to market hours (9:30 till 16:00 pm)?
10/20/01	10:11:10	<DTU__Ken>	yes
10/20/01	10:11:25	<DTU__Ken>	I only close out open swing trades for open gap profits premkt..
10/20/01	10:11:35	<DTU__Ken>	I used to do open gap buys, not so much lately
10/20/01	10:11:51	<DTU__Ken>	as we didn't get many premkt gap opens til post-sept 28th
10/20/01	10:12:11	<DTU__Ken>	we are now, so that's likely to change, eg premkt gap exhaustion fills and continuations
10/20/01	10:12:24	<DTU__Ken>	Second, there are trader who trade only exceptional news. What do think about that? If these questions are of interest for your seminar, which is excellent by the way, I would appreciate.
10/20/01	10:12:39	<DTU__Ken>	sure, news plays are fine, the main thing is to trade based on the chart...
10/20/01	10:12:49	<DTU__Ken>	not to assume that the news will take a stock price in a certain direction..
10/20/01	10:13:05	<DTU__Ken>	good examples are the FOMC releases, eg the anticipation move, the knee jerk reaction, and the reversal..
10/20/01	10:13:22	<DTU__Ken>	three distinct trading trends surrounding all the fed rate announcements..
10/20/01	10:13:36	<DTU__Ken>	Q: How do you identify key support/resistence before market opens?
10/20/01	10:13:39	<DTU__Ken>	A: very carefully
10/20/01	10:13:42	<DTU__Ken>	lol
10/20/01	10:13:59	<DTU__Ken>	actually, you should all get in the habit of drawing support/resistance lines on 2day charts, for daytrading..
10/20/01	10:14:11	<DTU__Ken>	this is relatively easy..
10/20/01	10:14:24	<DTU__Ken>	the hard part is integrating the rest of the data to time your entries and exits..
10/20/01	10:14:40	<DTU__Ken>	q: How do you decide on initial long/short triggers before market opens?
10/20/01	10:14:55	<DTU__Ken>	see http://www.DaytradingUniversity.com/alerts.htm
10/20/01	10:15:12	<DTU__Ken>	Q: great seminar so far.thanx and respect given. where or how does one find out which sector any stock may belong to and what its tier level might be.Is it something to do with market capitalisation.
10/20/01	10:15:27	<DTU__Ken>	see the faq page... and the transcript link I had posted.. for what we're currently training on
10/20/01	10:15:37	<TT0__Ken>	http://www.Daytrading-University.com/livetranscriptOct08_01.htm
10/20/01	10:15:49	<DTU__Ken>	tier level, yes related to market cap..
10/20/01	10:16:00	<DTU__Ken>	eg MSFT the tier 1 lead for software, INTC for semis etc..
10/20/01	10:16:17	<DTU__Ken>	Q: When you wait to buy .3 to .6 above the whole number above the previous day's high, doesn't it expend almost all the stocks momentum? Secondly, can i use these techniques for listed stocks?
10/20/01	10:16:25	<DTU__Ken>	it depends..
10/20/01	10:16:49	<DTU__Ken>	if the stock is coming off a previous day's low, and is thus at the top of it's intraday range, then you would be more careful
10/20/01	10:17:08	<DTU__Ken>	if, like EMLX , it's coming from the midrange, or near the top of the two-day range, then it usually works out very well
10/20/01	10:17:20	<DTU__Ken>	also make sure to pay attention to the COMPQ and if it's making a new 2day high
10/20/01	10:17:40	<DTU__Ken>	we are interested, in trades, as the stocks move ""out of the chop zone"" defined by the previous days' high and low
10/20/01	10:17:54	<DTU__Ken>	this is where institutional money plays, and so do we
10/20/01	10:18:22	<DTU__Ken>	q: Do you set up the alerts differently, or trade more/less conservatively depending on previous day's range in COMPQ?
10/20/01	10:18:32	<DTU__Ken>	absolutely...great question..
10/20/01	10:18:46	<DTU__Ken>	usually, we get a narrow range day following a wide range day..
10/20/01	10:19:00	<DTU__Ken>	so we anticipated this for thursday, following wed's drop, and had more conservative entries
10/20/01	10:19:25	<DTU__Ken>	we trade more aggressively whenever the compq is trading out of the previous day's range
10/20/01	10:19:33	<DTU__Ken>	we are more careful if it's within the previous day's range
10/20/01	10:19:46	<DTU__Ken>	the absolute worst spot to trade any stock is in the middle 1/3 of the previous day's range
10/20/01	10:19:50	<DTU__Ken>	tape that to the monitor
10/20/01	10:19:58	<DTU__Ken>	this is the ""stop zone""
10/20/01	10:20:38	<DTU__Ken>	you want to either get a retracement/bounce off a prev days' high /low, or a breakout/breakdown
10/20/01	10:20:47	<DTU__Ken>	use the previous day's range as your roadmap
10/20/01	10:21:23	<DTU__Ken>	ok excellent questions so far..
10/20/01	10:22:21	<DTU__Ken>	posting another screencap example from NVDA, one of my favorites..
10/20/01	10:22:56	<DTU__Ken>	I'm posting a 3day chart of NVDA so you can see what I'm talking about here..
10/20/01	10:23:29	<DTU__Ken>	ok everyone check out: http://www.Daytrading-University.com/nvdaoct19.gif
10/20/01	10:23:37	<DTU__Ken>	there's three days there..
10/20/01	10:23:48	<DTU__Ken>	what I've drawn is the high/low from wednesday..
10/20/01	10:24:02	<DTU__Ken>	and the ""chop zone"" , the middle 1/3 , marked with an X
10/20/01	10:24:16	<DTU__Ken>	there has not been a lot of trading opportunity in this stock thur/fru
10/20/01	10:24:20	<DTU__Ken>	thur fri
10/20/01	10:24:32	<DTU__Ken>	the small ""x""'s are the strong long/short triggers..
10/20/01	10:24:57	<DTU__Ken>	also if the stock races up to near the res level, eg 45.6, and starts to fade, a double top, then it would be a good short candidate
10/20/01	10:25:45	<DTU__Ken>	eg monday if it opens at say 45, climbs quickly to 45.4 and starts to sell back down, it would be a short trigger
10/20/01	10:26:16	<DTU__Ken>	or, if it say opens at 44.4 and sells down quickly to 42, then a long trigger would be near the 42.4+
10/20/01	10:26:35	<DTU__Ken>	this is ""shorting the right leg of the letter M"" or ""buying the right leg of the letter W"" type of trade
10/20/01	10:26:47	<DTU__Ken>	and again, these are weaker, lower-percentage, than a breakout/breakdown trade..
10/20/01	10:26:53	<DTU__Ken>	because why?
10/20/01	10:27:08	<DTU__Ken>	all intrarange trades are by definition what I call (c) or (d) trades... not as strong..
10/20/01	10:27:37	<DTU__Ken>	Q: What do you mean reading the tape / and do you have colors set in your level 2 at your preference?
10/20/01	10:27:58	<DTU__Ken>	reading the tape, there are a few sites out there w/bogus info... the things I've covered earlier are the details you should know
10/20/01	10:28:05	<DTU__Ken>	do that tape reading exercise I mentioned..
10/20/01	10:28:27	<DTU__Ken>	eg once a week, study the tape for one of your favorite stocks from 9:40 til 10 or 10:10..
10/20/01	10:28:43	<DTU__Ken>	see if you can correlate the tape speed, balance of buyers to sellers, with the chart pattern
10/20/01	10:28:50	<DTU__Ken>	you will find it's a remarkably useful drill
10/20/01	10:29:05	<DTU__Ken>	other sites tried to copy me, and offer little 'courses' in tape reading that are crap
10/20/01	10:29:23	<DTU__Ken>	the details of how to successfully use the tape as Part of your overall trading decision making, are what's important
10/20/01	10:29:43	<DTU__Ken>	compare performance :)
10/20/01	10:29:47	<DTU__Ken>	what else..
10/20/01	10:30:00	<DTU__Ken>	use a weighted approach..
10/20/01	10:30:05	<DTU__Ken>	eg COMPQ most important, with the TRINQ..
10/20/01	10:30:19	<DTU__Ken>	then break it down into ""What sector chart/percent is strongest/weakest on the day""
10/20/01	10:30:29	<DTU__Ken>	then look at the tier one stocks, are they making new highs/lows, or just chopping?
10/20/01	10:30:41	<DTU__Ken>	then look at the trading stocks you work with..
10/20/01	10:31:00	<DTU__Ken>	eg in semis, I like ones such as NVDA QLGC KLAC AMAT XLNX LLTC
10/20/01	10:31:18	<DTU__Ken>	in software, SEBL CHKP PSFT ADBE ERTS
10/20/01	10:31:28	<DTU__Ken>	in biotechs, PDLI AMGN BGEN HGSI MLNM IDPH
10/20/01	10:31:49	<DTU__Ken>	and then there's the networkers, hardware and others..
10/20/01	10:32:02	<DTU__Ken>	those three sectors have been best for daytrading this year ...semis, software, biotechs
10/20/01	10:32:26	<DTU__Ken>	nothing but ebay for nets, perhaps amzn yhoo pcln etc for swings, not as strong as the others tho
10/20/01	10:32:42	<DTU__Ken>	and vrsn for s/w, excellent
10/20/01	10:33:34	<DTU__Ken>	Ok traders, take a quick stretch... we'll do swing trading next!
10/20/01	10:34:33	<DTU__Ken>	hope that answers many of the questions.. I think I got em all
10/20/01	10:35:32	<DTU__Ken>	get a cup of coffee..
10/20/01	10:37:00	<TT0__Ken>	we are fortunate to have Alan Farley with us, from http://www.HardRightEdge.com .. I'll introduce him in a few minutes..
10/20/01	10:37:24	<TT0__Ken>	he will be doing the session on swing trading, he and tony are the two most credible sources I know for this..
10/20/01	10:37:48	<TT0__Ken>	so get any questions ready that you may have, mailto:ken@daytrading-university.com
10/20/01	10:38:35	<TT0__Ken>	it's good to have a variety of speakers, good ones.. as we can all learn new techniques..
10/20/01	10:39:12	<TT0__Ken>	I am very careful about whom to recommend, Alan's certainly a credible person, so I'm sure you'll all learn from him :)
10/20/01	10:39:41	<TT0__Ken>	it's a real short list, of people I recommend out there.. under 10 etc.. out of hundreds
10/20/01	10:41:02	<TT0__Ken>	Swing trading is popular for a variety of reasons, and given the current volatility and sec rules, it's definitely worth looking at..
10/20/01	10:41:16	<TT0__Ken>	voila..
10/20/01	10:41:30	<TT0__Ken>	so without further ado... let me introduce Alan...
10/20/01	10:41:35	<alanfarley>	on my command, unleash hell
10/20/01	10:41:53	<TT0__Ken>	Traders, we're fortunate to have Alan Farley with us, he's a noted author and a heckuva good swing trader authority
10/20/01	10:41:59	<TT0__Ken>	so I though I'd invite him here today..
10/20/01	10:42:18	<TT0__Ken>	Alan has a site http://www.HardRightEdge.com that I'd feel happy recommending to you..
10/20/01	10:42:32	<TT0__Ken>	and again, I get no comp for that, it's a good resource, so I recommend it..
10/20/01	10:42:51	<TT0__Ken>	so, let's all welcome Alan today.. Alan, take it away..
10/20/01	10:42:58	<alanfarley>	good morning and afternoon to everyone
10/20/01	10:43:18	<alanfarley>	maybe good evening to euros and other parts of the world in attendence
10/20/01	10:43:37	<alanfarley>	its saturday and the brain takes on a different bias after a long trading week
10/20/01	10:43:47	<alanfarley>	a great time to look back and see how we did
10/20/01	10:44:12	<alanfarley>	I am grateful to Ken to have the opportunity to share with you folks
10/20/01	10:44:26	<alanfarley>	now....down to business...
10/20/01	10:44:44	<alanfarley>	swing trading, in my mind, is a non time specific enterprise
10/20/01	10:44:57	<alanfarley>	its become associated with position trading but thats not quite accurate
10/20/01	10:45:14	<alanfarley>	swing trading reflects trading the swing (duh!)
10/20/01	10:45:27	<alanfarley>	that swing can be on a 5 min, 60 min, daily or weekly chart
10/20/01	10:45:41	<alanfarley>	its a point of view and an approach, more than a specific strategy
10/20/01	10:46:05	<alanfarley>	more than anything else, it revolves around working the market mechanics to your advantage
10/20/01	10:46:17	<alanfarley>	on the simplest level, its pure support and resistance plays.
10/20/01	10:46:28	<alanfarley>	but of course, Mr Market is a lot more than that
10/20/01	10:46:46	<alanfarley>	there are 100s of quirks to market dynamics that traders can take advantage of
10/20/01	10:46:58	<alanfarley>	it goes back to the concept of market inefficiency
10/20/01	10:47:17	<alanfarley>	price movement naturally creates opportunity as forces shift too far in either direction
10/20/01	10:47:49	<alanfarley>	the price charts exposes these epicenters of price/time where predictability rises above pure chance.
10/20/01	10:48:03	<alanfarley>	swing trading is VERY risk sensitve
10/20/01	10:48:27	<alanfarley>	while there is so much emphasis on finding high reward opportunity...
10/20/01	10:48:42	<alanfarley>	swing trading often invloves finding the low risk opportunity.
10/20/01	10:49:15	<alanfarley>	OKey DOkey...I've prepared 15 charts at the URL I'll pass along in a second
10/20/01	10:50:02	<alanfarley>	the download is only about 160K..ill post it and then give folks a chance to DL it in a separate browser. If you dont DL it, my talk will be very confusing <g>
10/20/01	10:50:26	<alanfarley>	here goes: http://www.tradersworkshop.com/dtu.htm
10/20/01	10:50:41	<alanfarley>	now ill wait a minute or two before we proceed
10/20/01	10:51:24	<_vboad>	Ken-In addition to the open market, are there any tools to maximize my 401k plan, ie. move from sector to sector, etc. Since it's
10/20/01	10:51:27	<alanfarley>	while we're waiting, a word from your advertiser <g> come visit at http://www.hardrightedge.com
10/20/01	10:52:11	<alanfarley>	I've also now joined the staff of TheStreet.com/RealMoney.com and am doing a twice weekly column
10/20/01	10:52:33	<alanfarley>	OK i'll assume you folks have the graphics in front of you
10/20/01	10:53:01	<alanfarley>	now a confession. Most of my trades this last week were not held overnight. Does that mean I'm not a swing trader?
10/20/01	10:53:05	<alanfarley>	nah
10/20/01	10:53:32	<alanfarley>	In fact, I go into most of them hoping to take them home, but the current market usually has me jumping ship at the first sign of danger.
10/20/01	10:53:43	<alanfarley>	just active risk management for difficult times
10/20/01	10:54:01	<alanfarley>	fig 1 shows the eiminis after wednesday
10/20/01	10:54:05	<alanfarley>	e-minis
10/20/01	10:54:23	<alanfarley>	the reversal a tkey reistance shifts the market stage
10/20/01	10:54:46	<alanfarley>	these shifting points are always very important in choosing the type of plays you want to make
10/20/01	10:55:08	<alanfarley>	in a strong rally, I usually wont sell short. vice verse in a strong decline.
10/20/01	10:55:35	<alanfarley>	but I rarely trade momentum. Im always looking for pullback, narrow range and the ""quiet"" before a storm in my direction
10/20/01	10:56:06	<alanfarley>	figs 2 and 3 show 2 setups I posted this week at thestreet. both are simple short side plays
10/20/01	10:57:20	<alanfarley>	#2 takes advantage of a little fibonacci knowledge and very bearish volume. One good decline on aflac deserves another. They play expects a price bar similar to the long one from 28 to 25.
10/20/01	10:57:46	<alanfarley>	they play is very risk sensitive. our exposure is only to about 27 but there 3-4 points of downside.
10/20/01	10:57:55	<alanfarley>	one thing to notice here is that it is not NASDAQ
10/20/01	10:58:19	<alanfarley>	the NYSE has its own flavor. And the best part is many traders ignore it, because Nasdaq is sexier
10/20/01	10:58:45	<alanfarley>	Trading NYSE means understanding the game of one single individual, the specialist.
10/20/01	10:59:14	<alanfarley>	fortunately for us, you can inspect their behavior through the odd price bars that appear from time to time on nyse charts.
10/20/01	10:59:26	<alanfarley>	they will rpeat their games at regular intervals
10/20/01	10:59:37	<alanfarley>	fig 3 is just a TA classic
10/20/01	10:59:57	<alanfarley>	PLUG is now down below 8 after 2 days of trading since the graphic
10/20/01	11:00:15	<alanfarley>	keeping an open mind with classic patterns pays off.
10/20/01	11:00:41	<alanfarley>	There was actually a much better set up here is PLUG turned up and broke the top of the descending highs
10/20/01	11:01:23	<alanfarley>	whenever you can catch the retail technician (those with too little TA knowledge) sitting on the common side of a pattern, the better the move when they get trapped
10/20/01	11:01:58	<alanfarley>	PLUG also highlights how to compute reward. Are we playing for a break of the september low?
10/20/01	11:02:01	<alanfarley>	NO!
10/20/01	11:02:27	<alanfarley>	we're looking for an aceleration of price bars (wide range) into that low. Thats our signal to exit the trade.
10/20/01	11:02:48	<alanfarley>	What happens at the first test of an old low (or first test of an old high)?
10/20/01	11:03:05	<alanfarley>	There is always a crowd ready to step in and reverse the market.
10/20/01	11:03:36	<alanfarley>	Our game to to be out of the trade before the reversal, rather than afterwards. There will be another example of this in a second
10/20/01	11:03:48	<alanfarley>	Now 3 pictures of Juniper
10/20/01	11:04:18	<alanfarley>	No 4 (also from thestreet.com this week) shows the necessity of counter intuive thinking.
10/20/01	11:04:35	<alanfarley>	intuitive ...spelling is hard on the run <g>
10/20/01	11:05:13	<alanfarley>	common TA wisdowm says fibs have strong resistance at 62%% of a bounce. So JNPR should reverse and fall off of 21?
10/20/01	11:05:20	<alanfarley>	well, not always...
10/20/01	11:05:52	<alanfarley>	The most dynamic trader happen when an irresistable force meets an immovable object
10/20/01	11:06:31	<alanfarley>	We have the resistance and a gap from August pushing down...and the big volume and up gap of last week pushing up
10/20/01	11:07:09	<alanfarley>	we know which way the momentum is, and expect a break above resistance will be vertical.
10/20/01	11:07:35	<alanfarley>	vertical = most favorable price/time relationship
10/20/01	11:07:43	<alanfarley>	usually that also means highest risk
10/20/01	11:08:23	<alanfarley>	But if we drop down to a lower time frame, figure 5 in this case, we can find managable risk through the pattern of this lower dimension
10/20/01	11:09:15	<alanfarley>	fig 5 shows that gap as support and a small congestion pattern. This gives us a natural stop loss calculation just under 20. The way I like to play these...
10/20/01	11:09:34	<alanfarley>	is to let the bars rise into the top of the congestion pattern
10/20/01	11:09:40	<_alex34>	got it now
10/20/01	11:09:59	<alanfarley>	Then hopefully I'll see volatility decline sharply and price bars narrow.
10/20/01	11:10:23	<alanfarley>	This tell me the last supply is being eaten up and the stock is ready to tackle the next price ramp.
10/20/01	11:11:06	<alanfarley>	JNPR jumped 4 points the next day. I dont have the image of the top of the range but other graphics here will illustrate this technique
10/20/01	11:11:39	<alanfarley>	OK the rest of the slides are trades I made this week. It was a great week, so forgive for not showing too many losers.
10/20/01	11:11:54	<alanfarley>	in fact, my biggest loss all week was under 25 cents
10/20/01	11:12:10	<alanfarley>	fig 6 is just a simple breakout day trade
10/20/01	11:12:42	<alanfarley>	I entered in the small congestion between 1330 and 1400, before the breakout.
10/20/01	11:12:59	<alanfarley>	those few bars told me the odds were in my favor.
10/20/01	11:13:16	<alanfarley>	Now the exit strategy here was more important than getting into the trade.
10/20/01	11:13:38	<alanfarley>	I was not interested in seeing JNPR head to some great new high. This was a scalp in my mind.
10/20/01	11:14:23	<alanfarley>	I looked at the next level of resistance, arounf 23. As soon as JNPR broke the downtrend, I immediately enter a sell order in ISLD for 22.98
10/20/01	11:14:39	<alanfarley>	Price often travels like a magnet to prior resistance levels
10/20/01	11:15:05	<alanfarley>	Now why not just watch the price action and wait on my order, or better still, place a trailing stop?
10/20/01	11:15:58	<alanfarley>	Well first, there was not much reward to begin with. second JNPR is very volatile. From the time a sell signal would hit me, until my order was active, I could lose 10-30%% of my
10/20/01	11:16:03	<alanfarley>	little profit.
10/20/01	11:16:50	<alanfarley>	A sell order over the market lets me take advantage of all those crazy momo traders who dont act until a price swing is well underway. I get to exit at the ask
10/20/01	11:17:06	<alanfarley>	while the rally ""appears"" to still be in progress
10/20/01	11:17:33	<alanfarley>	fig 7 advancpcs trade was not for the squeamish
10/20/01	11:17:50	<alanfarley>	look at 7 and 8 together
10/20/01	11:18:08	<alanfarley>	the stock broke out the day before and this was actually the first pullback

 

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10/20/01	11:18:35	<alanfarley>	classically this should be a good buying opportunity. But the tape on the stock was terible. look at the 5 min
10/20/01	11:19:08	<alanfarley>	I decided to put in a ""what the hell"" order way below the support I believe the stock would stop falling at.
10/20/01	11:19:43	<alanfarley>	What the Hell orders wont get fill 90%% of the time. I placed my order in this case at 75 although I thought the fall would stop around 76
10/20/01	11:20:05	<TT0__Ken>	lol
10/20/01	11:20:55	<alanfarley>	what the hell means, no matter how bad the selloff is, if it actually gets as far as my order, the reward: risk has shifted well into my favor
10/20/01	11:21:35	<alanfarley>	a friend calls that big ugly red bar on the 5 min a black marobuzu..(cant spell it)
10/20/01	11:22:05	<alanfarley>	its like a rubber duckie...hold it under the water deep enough and let go. the spring pops it out of the water
10/20/01	11:22:37	<alanfarley>	I got a fill at 75, watched it drop to 74 3/4 and it was above 76 in under 7 minutes
10/20/01	11:22:58	<alanfarley>	with a trade like this, you have to take what you get and go immediately
10/20/01	11:23:32	<alanfarley>	the stock is definitely broken and a retest is likely. I jump as soon asI got a point
10/20/01	11:23:49	<alanfarley>	there are some great message from figs 9 and 10
10/20/01	11:24:13	<alanfarley>	I bought the Hollywood breakout over 15 and got reversed immediately.
10/20/01	11:24:55	<alanfarley>	I jumped and lost about 15 cents. Sometimes the markets give one bar signals. The failed breakout is a classic. Now the problem comes in the trader's stomach
10/20/01	11:25:09	<alanfarley>	I was just wrong and had to take a loss. But....
10/20/01	11:25:26	<alanfarley>	The failed bar was a clear clean and strong sell signal.
10/20/01	11:25:44	<alanfarley>	It said there werent enough warm bodies to carry the stock over an obvious breakout level.
10/20/01	11:26:15	<alanfarley>	I took some Mylanta, waited about 10 minute to see if it had any energy left, and then sold short.
10/20/01	11:26:37	<alanfarley>	The bst trades are usually the ones that scare you the most. But what was my risk?
10/20/01	11:27:01	<alanfarley>	I sold at 14.92 and know that the breakout level was 15
10/20/01	11:27:33	<alanfarley>	10 cents risk but the possibility of all those folkd who bought that big triangle feeling trapped
10/20/01	11:28:15	<alanfarley>	great trade. I cover right at 14, because of that low back in early October
10/20/01	11:28:38	<alanfarley>	Only one message on figs 11 and 12
10/20/01	11:28:56	<alanfarley>	if you choose the wrong time frame to trade, you can get into trouble
10/20/01	11:29:08	<alanfarley>	It is another pretty looking cup and handle situation
10/20/01	11:29:30	<alanfarley>	But look how the specialist keeps the short term traders out of the stock
10/20/01	11:29:59	<alanfarley>	that channel motion all day Thursday killed the momentum
10/20/01	11:30:14	<alanfarley>	I got shaken out twice before I gave up.
10/20/01	11:30:52	<alanfarley>	If my time frame was intact, with a good multiday strategy. My stop would NEVER have been hit. But I was treating too much like a day trade
10/20/01	11:31:28	<alanfarley>	fig 13 was my second short sale of the week. a tiny little thing
10/20/01	11:31:49	<alanfarley>	its very similar to the 1-2-3 patterns back up on aflac
10/20/01	11:32:38	<alanfarley>	After a sharp decline you sell the first pullback and look for an equal move. But something inceded with my plan.
10/20/01	11:33:17	<alanfarley>	look at the time that extreme broke below 10 for the second time, apparently to test the morning low.
10/20/01	11:33:25	<alanfarley>	Lunchtime
10/20/01	11:33:44	<alanfarley>	I dont trust my eyes during the lunch hour, especially for followthrough
10/20/01	11:34:06	<alanfarley>	i basically gave up because of a time based, rather than price based stop
10/20/01	11:34:40	<alanfarley>	intraday has dozens of these little time quirks. I am especially fond of the omes I believe in <g>
10/20/01	11:35:13	<alanfarley>	fig 14 and 15 was my last trade and best trade of the week
10/20/01	11:35:47	<alanfarley>	ISSX is usually a fairly high risk stock. when you can uncover a low risk situation in a high risk stock, your bells should be going off.
10/20/01	11:36:00	<alanfarley>	I usually hate to trade a trendline.
10/20/01	11:36:18	<alanfarley>	If I see the trendline, I figure thats when the trendline will finally break
10/20/01	11:36:41	<alanfarley>	Some sort of wierd counterintuitive thinking, i suppose <g>.
10/20/01	11:36:55	<alanfarley>	But the swing trader's risk bells went off.
10/20/01	11:37:44	<alanfarley>	The trendline was right at 23. I could place a stop loss at 22.85 to 23.00, for 15 cents of risk and almost unlimited upside.
10/20/01	11:37:54	<alanfarley>	If I was wrong, no big deal
10/20/01	11:37:59	<alanfarley>	But if I was right....
10/20/01	11:38:57	<alanfarley>	I got filled at 23.02, 2 cents from the low for the day. I didnt have a fel for the price pattern so I backpeddled into a simple trailing stop strategy.
10/20/01	11:39:04	<alanfarley>	I didnt know what else to do with it
10/20/01	11:40:24	<alanfarley>	When it stopped and congested I move a trailing stop under the congestion. Never hit them. When price accelerated upward, I got nervous because of the whole number 25. As soon as I saw the somewhat ugly candle
10/20/01	11:40:50	<alanfarley>	I jumped ship. That trade was a gift, espcially on an options friday
10/20/01	11:41:16	<alanfarley>	So while Im sitting here counting my money for the week <g>, i have to deal with next week.
10/20/01	11:41:26	<alanfarley>	Swing traders are chameloens
10/20/01	11:41:36	<alanfarley>	chameleans..i cant spell it!
10/20/01	11:41:54	<alanfarley>	we change colors to accomodate changing conditions
10/20/01	11:42:10	<alanfarley>	If I try to trade next week like I did this week, IT WONT WORK
10/20/01	11:42:22	<alanfarley>	I believe in anticipation, ie having a market bias.
10/20/01	11:42:37	<alanfarley>	Then price action will converge or diverge with that point of view
10/20/01	11:42:48	<alanfarley>	That lets you know if your bias is BS or right on.
10/20/01	11:43:00	<alanfarley>	Then you can adjust your market aggressiveness.
10/20/01	11:43:09	<DTU__Ken>	exactly
10/20/01	11:43:14	<alanfarley>	OK I thin I may be running out of time...Ken?
10/20/01	11:43:22	<DTU__Ken>	lol.. great job Alan..
10/20/01	11:43:42	<DTU__Ken>	traders, applauding I'm sure..
10/20/01	11:44:05	<DTU__Ken>	Alan, I'd like to thank you very much, as you can all tell, he Knows what he's talking about
10/20/01	11:44:35	<alanfarley>	a pleasure to be here
10/20/01	11:44:37	<DTU__Ken>	and I can recommend that you get his books and his site's services ... Alan Farley's a good resource for swing trading
10/20/01	11:44:58	<DTU__Ken>	it's so very tough to find the wheat from the chaff... so, it's good to have quality here..
10/20/01	11:45:14	<DTU__Ken>	both you, and Scott, have added much to today's seminar, and for that, I thank you
10/20/01	11:45:25	<DTU__Ken>	traders, feel free to email either one to follow up..
10/20/01	11:45:37	<DTU__Ken>	Alan's site again is http://www.HardRightEdge.com
10/20/01	11:45:44	<DTU__Ken>	and Scott's is http://www.TradeCourse.com
10/20/01	11:45:49	<DTU__Ken>	both guys should be helpful to you
10/20/01	11:46:14	<DTU__Ken>	well traders, I don't know about you, but I'm beat
10/20/01	11:46:19	<DTU__Ken>	so let's call it a day..
10/20/01	11:46:34	<_phoenix>	is there a way to get this transcript ?
10/20/01	11:46:35	<DTU__Ken>	I know I had much more on swingtrading to share, but Alan's info is great .. so go with that..
10/20/01	11:46:51	<DTU__Ken>	I'll do a follow up next seminar in a few weeks or a month or so, and cover new materials..
10/20/01	11:47:14	<DTU__Ken>	I think we're all at ""information saturation"" here...
10/20/01	11:47:29	<DTU__Ken>	Alan, Scott, any final thoughts, parting words for the traders here?
10/20/01	11:47:56	<DTU__Ken>	and would go on for another hour or two :)
10/20/01	11:48:13	<alanfarley>	risk management is the ONLY holy grail of trading
10/20/01	11:48:40	<DTU__Ken>	well said.. that's the most important thing to 'get right'
10/20/01	11:49:03	<DTU__Ken>	many learned the hard way this year
10/20/01	11:49:33	<DTU__Ken>	traders, in response to all the dozens of emails, Yes I'll send out info on a transcript to you in day or two..
10/20/01	11:49:40	<DTU__Ken>	so no need to email me about it... thx :)
10/20/01	11:49:54	<DTU__Ken>	with links to the charts we've been covering..
10/20/01	11:51:21	<vince>	thanks Ken
10/20/01	11:52:18	<TT0__Ken>	to try out DTU's live room, see http://www.daytrading-university.com/livetrainingroomtrial.htm
10/20/01	11:52:22	<_jr77>	thanks
10/20/01	11:52:32	<TT0__Ken>	that's the extent of my self-ads :) you all know me..
10/20/01	11:52:40	<TT0__Ken>	anyways, hope you had a good time..
10/20/01	11:52:57	<TT0__Ken>	I Will answer all the remaining questions in an upcoming free follow up seminar for you..
10/20/01	11:53:28	<TT0__Ken>	I'm just tired, took 6 hours to register 680+ folks last night
10/20/01	11:53:50	<TT0__Ken>	Traders, on behalf of DTU, HardRightEdge and Tradecourse, I'd like to thank you all for being here.
10/20/01	11:54:01	<TT0__Ken>	have a great weekend, and take care
10/20/01	11:54:25	<TT0__Ken>	ok closing room here..
10/20/01	11:56:07	<scottc>	Trade Well everyone....
10/20/01	11:56:47	<TT0__Ken>	that should give you all a good balanced look at daytrading, order routing techniques, and swing trading... a good comprehensive session today
10/20/01	11:57:51	<DTU__Ken>	best wishes to all, ""may your profits be large and your profits be small""
10/20/01	11:57:54	<DTU__Ken>	aloha from hawaii
10/20/01	11:58:02	<DTU__Ken>	time to eat breakfast now
10/20/01	11:58:11	<_chez9>	best wish to you and your family :-))))
10/20/01	11:58:21	<_kathy33>	Thank you for your valuable expertise : )
10/20/01	12:00:25	<pablo>	very good seminar
10/20/01	12:00:39	<_jeanpt>	hi
10/20/01	12:01:42	<_phoenix>	thanks ken,scott and alan THAT WAS FANTASTIC !!! Where do I send the check to ?
10/20/01	12:05:11	<TT0__Ken>	thanks, and have a good one :)

 

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Many thanks to Alan Farley of http://www.HardRightEdge.com and Scott McVicker of http://www.TradeCourse.com for being Special Guest Presenters.

Go check out their services, I recommend both, and sign up for DTU's Live Room as well

 

 

See you in the next one, everybody! Good trading.