 However, it is my re-sponsibility to check it before I go to sleep every night.
AAPL was reaching the support levels it set earlier in the day.  I said "thankyou," and I bought 200 shares  at  113  5/16.  I  felt that the support at  112  3/4should hold, so I placed a stop  loss at  112 5/8, knowing that it would proba-bly never trigger.  My price target was the tops at  115  1/4.  I would, how-ever, give AAPL a chance to  go higher,  and if I  am able to sell  it at  116  1/2,1will be up  for the day.  "It shouldn't be a problem,"  I told  myself.
I was wrong!  112  3/4 was not strong support and AAPL broke through it.My stop was activated and I sold 200 AAPL at  112  3/8.
I actually had no problem with this trade.  It was managed and executedproperly.  But I was now down almost $800, so  I still needed  a winningtrade;  however, when you are running cold you should quit trading.  Eventhough I knew this rule, I wasn't going to give in.  And I was going to paythe price  to  learn this  lesson  all over again.
As I was screaming at my computer to give me a setup that I could trade,
AAPL bounced at  109  1/4.  I bought  100 shares at  110  1/8.  My price targetwas  115.  My stop  loss was placed at  108  7/8, which was just below  today'slow.  AAPL went up to  1 11  1/2.  FBCO was axing the stock, and it pulledback.  I sold  100 shares at  110  3/4.
PMCS peaked at  153  1/2.  I was silting tight in the trade.  I was up $1,163.00when the bid hit  153  3/8.  I could have sold my position right there andturned around my entire day.  However, I thought that the market had bot-tomed, and that it would be going straight up from here, and I didn't want tolose my position.  I placed a trailing stop for  100 shares at  149  15/16.  Iplaced a stop for the remaining  100 shares at  147  1/2.  I then raised my pricetarget to  178 -  185.  PMCS broke down through  150, and my first stop losswas activated.  I sold  100 shares at  149  13/16.
PMCS  found support at  143  and bounced.  Jt penetrated through resistance at145.  I  bought 200 shares  at  147.56.  My price target was  155.  I placed astop loss at 144 3/4.
PMCS broke down through  147  1/2.  My stop  loss  was activated.  I sold theremaining  100 shares at  146  1/2.  It may seem to many of you that the trail-ing stop  should  have been at a much higher price;  however,  you must under-stand that PMCS  is  a very volatile stock.  It can move 20  points  faster thananother stock will  move  1/2.  Last Tuesday,  the trading range on PMCS  wasmore than 62 points.  Therefore, five points is  not that much for this  stock.
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I was having a bad day.  I couldn't believe the lousy fill I got on my stop lossorder.  My loss was almost double what I was willing to lose on the trade.However, that is a part of the business.  In fast moving markets, a stock canfall down a lot further than where my stop loss is activated prior to my order
getting  executed.
While I was in PMCS, I also bought  100 shares of QCOM at  134 5/8.  I feltthat the market had bottomed and QCOM should make it back to the previ-ous highs at  139 and possibly go as high as  145.  I placed a stop loss at132 5/8, which was below today's low.
Here  is  another look at the Nasdaq chart.  As you  can  see, when QCOMbroke down to a new intraday low  at  11:50, the Nasdaq was well off its lowof the day.  QCOM  under performed the  market.  The Nasdaq was  approach-ing its 3850 support level at  12:15.  It managed to hold that level and trade
back up.
QCOM breaks through the low of the day.  My stop is activated.  I sold  100shares at  130 7/8.  It was a much bigger slippage than I anticipated.  My or-der was activated once the bid hit  132  5/8 but it was  13/4 below that beforeit was executed.
As the Nasdaq moved up, PMCS  found support at  146.  I bought  100  sharesat  146.  I placed a stop  loss at  144 3/4.  My price target was  153.
One of my rules  is:  When things don't look right, get out quickly.  This isexactly what I did on this last AAPL trade.
PMCS went up to  151.  I wasn't going to let it fall through me this time.  Isold  100 shares  at  150  1/8  when  I saw  the  first sign  of weakness.
What a great feeling.  I just made  up  for the  QCOM loss.  I was  studying themarket very closely.  It was bleeding heavily.  I was  looking at stocks, whichI had previously traded at prices three times this high, a mere six weeks ago,now falling down even further.  I was feeling the pain of the bulls.  My bloodwas in the streets right along with theirs.
After I  sold  PMCS  at  105  1/8  around  12:50,  it traded back down to  146  andchange.  It then started to gain steam and was about to challenge the  151high.  I reacted to the quick run the stock had and I bought  100 shares at150  7/16  and  100 shares  at  150 3/4.  I thought PMCS  was  going to breakoutand go to  156.  I placed a stop loss at  149  1/2.  This is a very tight play for avolatile  stock  like  PMCS.
AAPL was gaining some strength.  I bought 200 shares at  112  1/16.  Ithought it could go as high as  115, but the stock did not look too strong asFBCO was axing it again,  so 1 sold 200 shares at  112.
PMCS'did not take out the  highs  at  151.  It started to pull  back,  and  it acti-vated  my stop  loss.  I sold 200  shares  at  149  1/4.
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I jumped the gun on this trade fearing that  if PMCS  was to breakout, I wouldnot be able to get into the trade.  I didn't have a great entry, so I had  to cutthe  stock at the first sign  of weakness.  I was  really struggling, because  I wasarguing with the tape.  I felt that today should be the low, and that we wouldbounce strong from here.  I was looking for a swing trade setup  for withmulti-point gain potential.
AAPL was a perfect candidate.  It has pulled back in price sharply.  It wasright at what I thought should be decent support levels, and I thought thatwith the slightest bounce in  the market, AAPL should be back to  125 -  132.I felt this trade had a 75% chance to be a winner.
AAPL went as high as  114.  It then sold off sharply with the market.  It hit110  right  on  the  nose  (around 2:05PM)  and bounced.  I survived  the  sell  offand  my stop  loss was  not  activated.  AAPL bounced  back up to  112.  Theweight of the market finally broke it down, though.  AAPL penetratedthrough  110  at  15:10 PM,  and my stop  loss  was  activated.  I sold  200  shares
at  109.
If you  haven't figured it out by now,  1 was  having a "wonderful"  day at themarket.  I  had  taken  my biggest  loss  on  a  single  stock  in  the  challenge  earlythis  morning on INTC,  and now,  I have  a  new name which answers to thebiggest loss  taken on a single stock in  the  challenge.  I want you to under-stand, though,  that I was  not trying too hard  or was  taking unnecessary  risks.This  is how I really trade,  day in and day out.  Losing is  a part of the job,  andI  am  glad  you  are  getting to see all  aspects of it.
After this  last loss on AAPL, I realized that I had to keep  things  a little bittighter.  I was down  $1,587.45  for the day.  That is  $1,000  more than I wasdown  after the INTC  disaster this morning.  I knew I  should have quit trad-ing for the day, but,  emotionally, I just couldn't.  At this point,  I wanted to
make small profitable trades to build momentum and confidence going intothe last two days of the challenge.
I was playing the channel on PMCS.  I bought 200 shares at  148  13/16.  Thestock peaked at  150  1/4, and pulled back.  I sold 200 shares at  149 3/8.
I bought PMCS again at  148 3/16, as it bounced up from  145  1/2.  I sold itinto strength at  149.12.  I bought 200 shares at  147 and held into the close.The  stock closed  at  147  13/16.
I bought 200 JDSU at 99 31/32.  Stock peaked at  101.  It then sold offsharply.  I sold 200 shares  at 99  1/8.
I  also  bought 200  shares of JDSU  at 98  1/16 just before  the close.
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Today was an incredible busy day.  I started the day on the wrong foot, and Iwas never able to recover.  I felt that I was trading very poorly as I was try-ing to play catch-up.  Only God knows how the day would have ended if Iwas to sell TNTC in the morning for profit, or sell PMCS when I was up wellover $1,000 on that position and green for the day, or sell AAPL for a mini-mal profit or loss.  These were the pivot points of the day.  I was trying tofight  the tape on many occasions, yet I felt that the reward was worth therisk.  The Nasdaq was down 285 points today, yet I only lost $1,109.50 afterstarting the day down $585 on INTC.  The market is looking very ugly, yet Iam holding long positions overnight.  I guess we will find out tomorrow if Iwas right or wrong.
Open  positions:  200 JDSU, 200 PMCSTotal profit for 4/12/00: $-1,109.50
Here is another look at what the Nasdaq has done over the last seven tradingdays.  We arc about  100 points higher than the low we made last week.Volatility is the highest I have ever seen.  I thought that the downside risk atthis point was limited.  I felt that 3650 would hold if it gets tested again, andthe Nasdaq would go back to 4200 in a heart beat, so I was willing to carrymy two positions in PMCS and JDSU overnight.
PMCS was trading higher after-hours.  I offered out 100 shares at 152 onISLD ECN.  I got hit for 89 shares.  I sold 89 shares at  152.  I was followingthe activity on the ISLD book very closely because I had an open order tosell the remaining  11 shares at  152.  It was almost 8:00 PM EST, and therewere  two  traders who desperately wanted  to sell  their shares of PMCS.  Thebest bid on ISLD was  148  1/4 for 300 shares.  I joined the bid at  148  1/4 for89  shares.  I  felt  that the trader with  the  1000 shares  was  going to  sell  at thatprice.  Me was competing with another trader who wanted to sell 400 shares.As one will offer his shares on ISLD at a certain price, the other will jump infront offering his shares at a  1/16 lower. The best offer was at  149  1/2.  Withthree minutes  left,  I  finally  got my  fill.  Someone sold me 89 shares at  1481/4.  My position was 200 shares again, so I cancelled my order to sell  11shares at  152.
Traffic  Jam
DAY NINETEEN
Thursday, April 13,2000
I  had  two  alarm clocks  set to  go  off at 4:30  AM,  and  they didn't  fail  me.When the annoying beeping sound broke the silence, I quickly jumped out ofbed.  It was still dark out.  Thank God I didn't sleep in.
I didn't do any overnight analysis, and I had no trades planned out.  My mainconcern was to manage my overnight positions properly.  I went upstairs,turned on the computer and logged in to my MB Trading Account.  My P&Ltotal was showing +$800.  This means that my positions were trading higherin pre-market action.  Since I felt the market was oversold, I was going towait for the opening bell and see if my stocks could run higher.  I was hopingfor a short squeeze this morning.
Ding! Ding!  The market was now open.  Both PMCS and JDSU were hold-ing their gains.  It was 5 minutes into the action when my cable modem ser-vice came to a halt.  I was now completely blind,  I couldn't see where any-thing was.  I immediately picked up the phone and called the MB Tradingdesk.  My call was answered immediately.  The broker on the other sideasked me what I wished to do, and I told him to sell both PMCS and JDSU atthe market.  This was as painless as painless can be for this kind of experi-ence.  I was very impressed.  The broker executed my orders very quickly.
Since I have been in these scenarios many times in the past with differentbrokers, I have a note posted to my monitor with directions of how to speedup the process of placing trades over the phone.
Hi, this is Tony Oz. I'd like to place a trade.  My four letter ID is XXXX.Sell to close 200 shares of PMCS at the market.  Sell to close 200 shares ofJDSU at the market.
If you care about speed, always place market orders.  Avoid small talk.  Letthe broker know you want to place a trade immediately.  Have all your infoready.  Make sure to use the words to open or to close.  This will save thetime of him asking you if you own the stock or not.
I  sold 200  PMCS at  1495/16.
I sold 200 JDSU at 97  11/16.
It was about 9:50 AM, and it seemed that @home was back in business.  Myquotes seemed to be working now.
PMCS sold off hard but had bounced from a low of 138  1/4.  It was racingup.  I entered an order to buy  100 shares at  145  on ARC A.  The best offerwas at 142 at the time.  It took a long minute, and I got a confirmation that Ibought  100 shares at 144  1/2.  PMCS was still running.  I was getting spurtsof data that were inconsistent.  I entered a sell order on ARCA for  100 sharesat $1.00.  I was basically telling ARCA to get me out at the best possibleprice.  PMCS was at the high of the run at the time, trading at 148  1/2.1 gotmy confirmation.  I sold  100 shares at 148 3/8.
I felt very fortunate to get out of the trade without any harm as my cable con-nection was now completely lost.  I didn't want to trade on my backup ma-chine which is connected via DSL, because it seemed to be slow as well.  Ilater found out that the problems I was having with my @home service waswidely spread.  In fact, users from California all the way to Florida had trou-ble connecting to the net.
I didn't make a lot of money, but I was very happy to have a profitable day.My cable connection came back on around  1:00 PM, and I watched the mar-ket carefully for a high percentage trade.  The market was tanking hardagain.
When the final bell rang, the bears won another battle.  The Nasdaq, whichwas up as much as  145  points  for the day, managed to reverse direction andclose down 93  points.  It wasn't looking good  for the bulls.
Open  positions:  NoneTotal  profit  for 4/13/00:  $628.38
Cash  is  a  Position
DAY  TWENTY
Friday, April  14, 2000
In preparation  for the last day of the challenge, I spent a lot of time research-ing the highest probability long setups.  1 wrote down price levels of supportand resistance for the indexes and all stocks on my Constant watch list.  Ithen started a word processing program, I selected 72 point bold fonts, and Ityped  "TRADE  SMART."  Next,  I  printed  out  four  copies.  I  stapled  eachone of the copies to the wall, so I could see it no matter what monitor I wassitting  behind.
I had no problem getting out of bed this morning.  I was ready for the lastday of the challenge, and I wanted to make this one count.  I felt that theNasdaq was  approaching support levels  again,  and I  was  looking to  buy myfavorite stocks  at bargain prices.  I went upstairs  and  sat at my computer.  AsI was logging into my MB Trading software, I glanced over the monitor andsaw the mini-posters I made last night.  I chuckled in amusement, and prom-ised myself that I will obey the command.  I was ready to trade.
The  futures were down sharply,  and  pre-market trading showed great weak-ness.  I was  licking my chops.  This  is the day I have been waiting for.
The Nasdaq  gapped down big this morning, and it took out the previous  lowmade  last week,  at the  open.
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The  forth and  final  week of the  challenge was now  over.  It  was  a  majordown  week  for  the  market.  The Nasdaq  Composite  lost  1125  points,  a25.3%  decline  in  five  days.  The  Dow  Jones  Industrial  Average  lost 7.9%  forthe  week,  and  the  S&P  500  Index  lost  10.6%.  It  was  a  broad  market  sell  off.
I  started  the week  trading very well.  I  felt that my trading on  Monday  andTuesday was  in  top  form.  I struggled on  Wednesday from  the minute  I wokeup.  On Thursday,  I had connectivity problems,  but I still  managed  to have  aprofitable  day.  On  Friday,  I  sat  on  the  sidelines  and  watched  the  sharpestsingle-day point drop  on  the Nasdaq  as  it lost  355  points
I was  amazed that I actually turned  a profit this  week.  My total  profits forweek four were  $3,046.23.  I  faxed MB  Trading a  request  for a check  in  theamount of $3,000.00.  After all,  Friday is payday!
I  almost got suckered into  the first bounce, which took out the morning highsat  10:15.  I decided that the smart thing to do will be to wait for a pullback,because the index raced about  100 points in  18 minutes.  My strategy was towail for a pullback, then look to see if the next rally can take out the intradayhigh.  This will  be  the sign of a trend reversal.
The  index  failed to do so,  and at  11:00,  it broke down hard and took out thelow of the  day.  The  index  broke  through  3500.  The  lunchtime rally was  notconvincing for the simple reason  that margin selling was not over yet.  At1:30,  things  turned around  again.  It was the worst blood bath I have everseen,  and  there was no way I was going  to contribute any of my own bloodto the brutal bear assault.
It was  the last day of the challenge, and I was going to play it as a golfer whohas a  15 shot lead going into Sunday in Augusta.  I just want to shoot par to-day.  I was watching this painful display, and at 2:00 PM we blew the whis-tle.  The challenge was now officially over, and I ordered a check.
However,  once I  saw  all  the  blood  in  the  street,  I just could  not hold myselfback,  and  I  bought $100,000  worth  of QQQ  for a swing trade.  I  knew thistrade would not count as a part of the statistics for the challenge, but I justhad to  make  that trade.  I  felt that at 3300,  my risk/reward ratio  was  high.
Total  profit  for 4/13/00:  $0.00
Thank You, But No Champagne for Me
My wife and I had plans for a celebration dinner following the last tradingday of the challenge.  But I was very depressed.  I  had just witnessed a brutalbear market in which  trillions of dollars were  lost.  You would think that Iwould be glowing with my success in making decent returns  in such a downmarket,  but the truth is that I have experienced the worst weekend of my lifeas  a professional  trader.
I am very close to the trading community and correspond with many daytraders who vary in their level  of expertise.  Some are professionals, someare amateurs,  and some are just starting out.  The stories were very similar.Many traders  lost  a  lot  of money over the  last  few  weeks.  There  were  a  fewsuccess stories  as  well,  which were  uplifting,  but many of the stories werehorrifying.
I  had  a very  long talk with  my dad on Friday night.  He was  very concernedthat the crash of the market would reduce consumer spending and result in  arecession.  I  didn't  know what to  tell  him,  but his  concern was'not very com-forting.
My uncle, who lives across the Atlantic Ocean, called me early Saturdaymorning.  He was concerned about my financial situation as he heard on thenews that the stock market crashed.  He was happy to hear that I survived.  Ilater learned that he lost a big chunk of his own trading account.  "The mar-ket gives  it,  and the market takes  it  away," said his wife.
These were the types of conversations I had with many individuals over theweekend.  The devastation and turmoil so many of my friends and familywere experiencing took all  the air out of the satisfaction I would have other-wise been  feeling about my own accomplishments.  I was definitely in  nomood to celebrate.  "It will  have to wait," I  told my wife, who was  very un-derstanding.
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The Secret to  Success
I think I  have  learned many great things  from this  four-week challenge.  Forthe  first  time  in  my  life,  I really understand the  meaning of the  phrase,  "Bullsmake  money,  bears  make money,  and pigs  get  slaughtered,"  I  have  provento myself that my simple trading system can be traded successfully, on thelong side,  in a bear market.  This was a question  I  was asked many times bymy students, and at the time,  I couldn't answer it, because I never traded in abear market before.  I think this diary answers that question very well.
The  most important  lesson,  however,  is  found  in  each  and  every case  study Ihave  featured.  It has to do  with religiously adhering to the rules and guide-lines of a trading system.  I know for a fact that my discipline in executingeach and every trade according to my trading system is  the secret to my suc-cess.  This  is  why I had  the  courage  to  accept  this  challenge.
When I started.teaching seminars about high probability short-term trading,my performance  chart was  improving on  a consistent basis.  The  reason  wasthat every time I was tempted to break a rule,  I  would ask myself, "How areyou going to explain this one to your students?"  This question has taken mytrading to the next level.
If you want to improve your trading, what you  need to do  is very simple.Before you enter any trade, think that you will have to explain this trade tothe world  in a case study format.  You have to explain the  reason  for entry,your risk management guidelines,  and  why you  exited  the  trade.  If you  cantruly  do  this,  I  strongly  believe  that  you  can  enjoy  the  same  type  of success  Ihave enjoyed in this challenge.  And that, my friend, is the greatest lesson ofthis book.  Trade as  if the world was standing behind your shoulders.
As  you  should all  know  by now,  my trading system  is  very simple.  It ismade  of two  words:  Support  and  Resistance.  I  don't  use  sophisticated  tech-nical indicators.  I keep things very simple, and as  far as I am concerned,simple strategies  make an advanced trading system.  I  have  featured  all  thetechnical setups and Level II order execution methods in my previous book,Stock Trading  Wizard.  I  hope that you were able to follow,  throughout thisbook, how I actually trade these setups  in real  life.
Day Trading  has  been  greatly disparaged  by  the  media,  with  reporters  focus-ing on those who have lost all their money, while ignoring those who aresuccessful.  Many of the subjects  of these  reports  were  inexperienced and un-trained, and hadn't yet learned the  fundamentals of the business they hadchosen. They risked all they had without a plan, without rules, and withoutany tested, systematic methodology whatsoever.  No business can survivewithout a solid business plan rigorously followed, yet we see no sensational-ized media stories about all the small businesses that fail each year in otherindustries as the result of the same  lack of planning.
In this  book,  I  have provided  you  with  a simple system of trading that I be-lieve most anyone can follow.  I have proven my system in combat, in themidst of a 30% market crash, where I netted a 32.5% Return.  I have givennumerous examples and details regarding the various circumstances of eachtrade, allowing you to get the "feel" of trading my system, that goes beyondmere theory.  I  have  been very honest  in  showing you  the consequences  Isuffered as a result of not practicing my own rules, and I have shown youthose times when I did everything right, yet I still lost money just the same.But, through it all, I made a comfortable living every week for the durationof the challenge, in the midst of some very rough times in the market.  Andthe  only  reason  is,  because  I  stuck  as  closely as  I could  to  the  rules  of mysystem.  That is the secret to my success. And that is how I make a livingtrading  stocks.
Challenge Summary
For the four weeks of the challenge, I made a total profit of $16,277.25.  Thiswas a 32.55% return on the $50,000.00 I  opened  the account with.  Therewas no compounding of profits,  since I ordered a check at the end of eachweek.  My overnight risk management kept me in small positions or no posi-tions overnight due to bearish market conditions.  The longest I held anyopen position was two days.
Since all the stocks I traded were in the tech sector, the performance of theNasdaq stock market will be the realistic measure for any kind of perform-ance comparison.  The  following chart covers the Nasdaq performance  forthe same period of time as the challenge.
The Nasdaq lost  1476 points,  or 30.78%  in the time frame of the challenge.A bear market by definition is a price retracement that is greater than 20%from the highs, so my trading took place in a bear market for technologystocks.
Only time will tell what these four weeks will be called by the experts, or ifthis was just the beginning of a much steeper decline.  Was this the buyingopportunity of the new millennium?  The bulls and bears can argue aboutthis one for as long as they wish.  I will still trade the market the very sameway I  did  in  this  book  -  Support  and  Resistance.
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There  are  some  very important numbers  that you can study  from  your tradingrecords  that can help make you a better trader.
The first number is Win/Loss Ratio.
There are 116 trades illustrated in this challenge of which 75 are winners and41  arc losers.  So I have executed a winning trade 64.6% of the time  and Ihave  executed  a  losing  trade  35.4%  of the  time.  This  slat  may seem'impres-sive,  but  it doesn't mean much,  because you can  have this win  to  loss ratioevery month and still  lose money consistently.  I have mentioned that myonly goal is to trade well, so I study my numbers a little bit differently thanyou might expect.  I  have designed a performance chart to give me a clearerpicture of my trading.
At the end of every month, I create a performance table which covers all  mytrades.  This table tells me i fl am trading well or not.  In this table, I will in-clude the dollar amount I have made or lost on