," 200-201Enough on Greed .........Now Let's Dealwith Fear, 187Farmer, The Gambler, and theSpeculator, The, 212Fear and Greed, Looking Them in theFace Again, 194Folks, It Just Can't Be Done, 2 14 -2 15Hillary, Highs Hopes, and Heartaches,227How to Buy aSystem/Newsletter ....... They AreAll Making Money!, 204-205How to Measure the Public vs. the Pros,213If You're Supposed to Quit When YouAre Ahead, Shouldn't You StartWhen You Are Behind?, 198-199In an Information Age ......... InformationIs Not Enough, 188It's Not the Trade, It's the Battle, 192Learning How to Lose Money, 224Lock-Up Time, 186Medea, 225-226Most Important Trading Belief YouHave, The, 203Nervous Nellies-Heaven Bound, 228Number One Reason We Lose MoneyTrading, The, 202Pepsi Proves the Point, 195Review of Losing Trades Showed That,A, 197Running, Trading, and Losing, 189Rush of Trading, The, 216-217Secrets of System Developing andTrading, 229-230Show Must Go On, The, 2 2 2Twitching Worms and Traders, 206What Causes Stock and CommodityMarket Trends, 210-211Why Most Traders Lose Most of theTime, 196
Worst Dog I Ever Had, Cost the Most,The, 207-208Commodity Traders Consumer Reports, 2 05,207,217Commodity Trend Service, 208Computer technology, impact of, 78-79Confidence, in speculators, 168-169Control:risk and, 46significance of, 225Cootner, Paul, 81-83Crawford, Arch, 247Cycles:moving average, 24-26opening, high/low, 33-36range change, 27-33types of, generally, 2 3-24, 2
DDaily range breakouts, 61-65Daily range values, 58Day traders, 47Day trading, 133, 139Day of week dependency, 83DeMark, Tom, 37Dependency, day of week, 83Dominant cycle, 23Dorffman, Dan, 76Dow Jones Average, 148Dow Jones 30 index, 148Downtrends, 39, 104, 109Drawdown, 52, 64, 154, 178-179Dunnigan, Richard, 93
EEfficient market, 81, 83Emotional trades, 100, 114, 225-226Entry techniques, generally:Talon system, 71-72TDW (trade day of week) strategy,61-64,66-70,72, 84-87
Index
Exit rules, 15 7
H
Exit techniques, 87-88Hailer, Gil, 10Hailer Theory (Hailer), 10F
Harriman, E. H., 79-80
Failures. See Losing trades
Hidden smash day, 102, 104
Failure swings, 123
High, in short-term market:
Head and shoulders, 12
Favors, Jerry, 247Fear:
defined, 16intermediate, 17-20
dealing with, generally, 187, 194, 203,206,220-221in speculators, 169-170
High/low concept, 13 3Holding strategies, 45-46, 51-53Hooper, Curt, 12
Federal Reserve, 78Fetridge, Alice, 10Filtered trades, 72-73, 95, 152, 155
1
First-of-the-month trades, 149Fixed ratio trading, 179-180
Indicators, analysis of, 76
Flags, 12Fly-fishing analogy, 193
Information age, 78-79, 188
Focus, importance of, 195
Inside day, 16-17
Forecasting, 94, 133, 214-215,218-220Fosback, Norm, 120
Intermediate highs, 17-20Intermediate lows, 17-20Intraday traders, 127
Freight train theory, 2 10Futures Factors, 208G
J
Joe, Frankie, 78Jones, Ryan, 179-180, 199
Gain, 45Gambling, 162-163, 166, 212Games of chance, 84
K
Gann, W. D., 195, 246Gartley, 93
Kelly formula, 174-177, 179
Genesis Data, 184Gold, 84-85, 124, 138, 141, 152-156Granville, Joe, 10
L
Greatest swing value (GSV):applications, generally, 126-128
Lane, George, 6
defined, 123-124
Large-range days, 27-36, 47-48
stock index trading, 124-128
Linden, W. L., 94
volatility breakouts and, 128-129
Livermore, Jesse, 54
251
252
Index
Losing trades, dealing with, 45, 54-55, 73,189-190,197,199,202,222-224,231Loss reduction strategies, 47Low, in short-term market:defined, 16intermediate, 17-20MMarket analysis, 46Market belief, 4-5Market psychology. See Commodity TimingarticlesMarket structure, 15-22, 46, 77Market trends:impact of, generally, 2, 210-211price pattern and, 36-43Market Vane, 77Market volatility. See Volatility breakoutsMathematical models, 77McAferty, Jack, 5-6Medea, 225Meehan, Bill, 9Mental errors, 192Merrill, Art, 120Miller, joe, 10, 12, 38Momentum stocks, 10Money management:advantage s/dis advantages of, 175-178computer software, ULTIMANAGERprogram, 183-184drawdown, 178-179fixed ratio trading, 179-180hit-and-miss approach, 172Kelly formula, 174-177, 179risk factor, 181, 183significance of, 2-3, 64Month-end trading:bond market, 149-152stock indexes, 147-149Monthly road maps, 89-92Moving average:impact of, generally, 24-26, 603~bar, 136
M tops, 12Murphy, John, 152Mutual funds, 4
NNader, Ralph, 76Naked close, 101National Futures Association, 175Negative Nellies, 246Newsletters, 204-205Nonfiltered trades, 72Nonrandom market, 14-15, 35, 81
0Omega Research, 79On Balance Volume (OBV) charts, 10,12,381-2-3 formations, 12Oops! pattern:defined, 113-118S&P trading, 119-120Open, volatility expansion value and,60Opening, high/low, 33-36Opening exit rule, 96-97Opening price, 12Open-to-close patterns, 34Optimal F, 177Oscilllators, 60Outside day, 16-17Overbought/oversold markets, 57Overconfidence, 196Overtrading, 164
pParker, Glen, 120Patience, significance of, 164-165Patterns:common elements, 94-99
Index
determination of, questions to ask,99-100Oops!, 113-120price (see Price patterns)smash day, 101-108specialists' trap, 108-113time frame and, 113Pennants, 12Perfect system, 247Pit boss adage, 163Pork Bellies, 13, 18, 21Prediction:chart formations and, 93short-term market and, 47, 53Price momentum, analysis of, 76Price movement:cycles, 28-33implications of, generally, 10-11, 13Price patterns:analysis of, 76types of, generally, 36-43Primary market, 13 8Probability, long-range days, 34-35Professional traders, 2 13Profitability, 47Psychology, 216-217
QQuote screen traders:characteristics of, 132strategies, 132-133three-bar high/low system, 136-138trend changes (see Trend changes)Will-Spread, 138-145
RRallies, 15, 233-234Random Character of Stock Prices, The(Cootner), 81Randomness, 14, 81-83Random walk, 82, 84-85
253
Ratschke, Linda Bradford, 113-114Real-time trading, 124Resource allocation, 2Reversals, 47, 102, 138Risk-aversion, 164Risk capital, 4Risk reduction strategies., 45-46
SS&P 500, 66-67, 76-77, 83-84, 86-89. 94,119-120,235-237Seaman, George, 93Secondary market, 138Secret of Selecting Stock, The (Williarns), 2 34Selling strategies, 36Sell setup, smash day, 101Sell signals, 109, 115-117, 123-124,154-156Sell swing values, 127Sentiment indicators, 77Short-term market, defined, 16Short-term trading theory:defined, 75illustration of, E. H. Harriman's rule,79-80information age and, 78-79news and, 76public traders and, 77Small-range day, 27-33, 36, 47, 51Smash day patterns:applications, 104-105defined, 101-104illustrations, 105-108Southard, Don, 10, 12, 38Specialists, 108-113Speculation:defined, 160-161gambling and, 162-163implications of, generally, 3-4, 9-10, 26,29, 43, 45, 73, 77, 80rich people and, 162-163risk-takers, 163-164systems development and, 165
254
index
Speculation (Continued)timing and, 161, 164-167trade management, 161-162winning trades and, 167-168Speculators. See Speculation:aggressiveness in, 170characteristics of, 8, 35confidence in, 168-169ego,167-168fear in, 169-170Stand-alone trade, 97Stock, Mike, 152Stock index trading, 124Stock market crash of 1987, 141-145Stop-loss protection, 46, 48Stops, generally:money management and, 240-243purpose of, 240Stowell,Joe, 101Supply and demand, 12System development, 204-205, 229-230
T
Thorn, Mark, 184, 199Three-bar high/low system, 136-138Time frame, significance of, 46-55Time-of-the-month trades, 147Tops, 38-39, 55, 133Townsend-Greenspan, 94Trade Station, 79Traders:professionals distinguished fromamateurs, 213success factors, 45, 231-232Training, importance of, 191Traps, selling, 109Treasury bonds, U.S., 83-85, 88, 139-141.See also Bond marketTrend(s)analysis, 36-43change (see Trend change)defined, 58price movement and, 14Trend change:classic pattern, 13 3swing points as indicators, 134-135
Trendlines, 60Triangles, 12
Talon system, 71-72Tape reading, 47Target months, 148Taylor, Owen, 93TDM (trading day of the month) strategy:bias and, 88road maps, 89-92success of, 92TDW (trade day of week) strategy:bias in, 87-88greatest swing value (GSV), 12 3-124overview, 61-64, 66-70, 72patterns, 94-97random markets, 84-87success of, 92Technical analysis, 10, 13Technical Analysis of Stock Trends(Edwards/Magee), 93Thatcher, F. B., 246
UUlmer, Riuchard, 6ULTIMANAGER, 183-184Uptrends, 38-39
vValue, 1-2Variable input, 180Vince, Ralph, 173, 176-177, 179-180,198Volatility breakouts:defined, 58greatest swing value (GSV), 128-129market swings and, 71-72
Index
measurement, 58-60
Will-Sspread:
S&P 500, 66-71
overview, 138-141
simple daily range breakouts, 61-65
S&P 500 stock index, 141-145Wyckoff, Richard, 93, 108
WzWall Street.Journal, 76W bottoms, 12Wealth creation, 171, 180, 200-201Wedges 12
Zweig, Marty, 152
255
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