½, 3500 @ 5/8, 2800 @ 7/8, 4100 @ 182Steel 45 ½….From then right up to the close it's nothing but bull, andeverything closes within a fraction of its highest. Reading makes 1343/8, Union 183, Steel 46 1/8, Central 128 7/8, and the rest in proportion.The market has gained such headway that it will take dire news toprevent a high, wide opening on Monday, and the Tape Reader has hischoice of closing out at the high point or putting in a stop and taking hischances over Sunday.So we see the advantage of watching a dull market and getting inthe moment it starts out of its rut. One could almost draw lines on thechart of a leader like Union or Reading (the upper line being the highpoint of its monotonous swing and the lower line the low point) and buyor sell whenever the line is crossed. Because when a stock shakes itselfloose from a narrow radius it is clear that the accumulation ordistribution or resting spell has been completed and new forces are
Richard D. Wyckoff
at work. These forces are most pronounced and effective at thebeginning of the new move -- more power is needed to start a thing thanto keep it going.Some of my readers may think I am giving illustrations afterthese things happen on the tape, and that what a Tape Reader would havedone at the time is problematical.I therefore wish to state that my tape illustrations are taken fromthe indications which actually showed themselves when they werefreshly printed on the tape, at that time I did not know what was going tohappen.There are other ways in which a trader may employ himselfduring dull periods. One is to keep tab on the points of resistance in theleaders and play on them for fractional profits. This, we admit, is arather precarious occupation, as the operating expenses constitute anextremely heavy percentage against the player, especially when theleading stocks only swing a point or so per day.But if one chooses to take these chances rather than be idle,the best way is to keep a chart on which should be recorded everyfluctuation.This forms a picture of what is occurring and clearly defines thepoints of resistance, as well as the momentary trend.In the following chart the stock opens at 181¼ and the first pointof resistance is 181½. The first indication of a downward trend is shownin the dip to 181 1/8, and with these two straws showing the tendency,the Tape Reader goes short "at the market," getting, say, 181¼ (we'llgive ourselves the worst of it).After making one more unsuccessful attempt to break through theresistance at 181½, the trend turns unmistakably downward, as shown byan almost and broken series of lower tops and bottoms.
Richard D. Wyckoff
These indicate that the pressure is heavy enough to force theprice to new low levels, and at the same time it is sufficient to preventthe rally going quite as high as on the previous bulge.At 180 1/8 a new point of resistance appears. The decline ischecked. The Tape Reader must cover and go long -- the steps are nowupward and as the price approaches the former point of resistance hewatches it narrowly for his indication to close out. This time, however,there is but slight opposition to the advance, and the price breaksthrough. He keeps his long stock.In making the initial trade he placed a "double" stop at 181 5/8 or3/4, on the ground that if his stock overcame the resistance at 181 1/2 itwould go higher and he would have to go with it. Being short 100shares, his double stop order would read "Buy 200 at 181 5/8 stop".Of course the price might just catch his stop and go lower. Thesethings will happen, and anyone who cannot face them without becomingperturbed had better learn self-control.
Richard D. Wyckoff
After going long around the low point, he should place anotherdouble stop at 180 or 179 7/8, for if the point of resistance is brokenthrough after he has covered and gone long, he must switch his positionin an instant. Not to do so would place him in the attitude of a guesser.If he is playing on this plan he must not dilute it with other ideas.Remember this method is only applicable to a very dull market,and, as we have said, is precarious business.We cannot recommend it.It will not as a rule pay the Tape Reader to attempt scalpingfractions out of the leaders in a dull market. Commissions, taxes and theinvisible eighth, in addition to frequent losses, form too great a handicap.There must be wide swings if profits are to exceed losses. and the thingto do is wait for good opportunities."The market is always with us" is an old and true saying. We arenot compelled to trade and results do not depend on how often we trade,but on how much money we make.There is another way of turning a dull market to good account,and that is by trading in the stocks which are temporarily active, owingto manipulative or other causes.The Tape Reader does not in the care a bit what sort of a labelthey put on the goods. Call a stock "Harlem Goats preferred" if you like,and make it active, preferably by means of manipulation, and the agileTape Reader will trade in it with profit. It doesn’t matters to himwhether it's a railroad or a shooting gallery; whether it declares regular or"Irish" dividends; whether the abbreviation is X Y Z or Z Y X -- so longas it furnishes indications and a broad liquid market on which to get inand out.Take Beet Sugar on March 26, 1909, the day on which Union andReading were so dull. It was easy to beat Beet Sugar. Even an embryoTape Reader would have gone long at 30 or below, and as it never lefthim in doubt he could have dumped it at the top just before the close, orheld it till the next day, when it touched 33½.
Richard D. Wyckoff
On March 5,1909, Kansas City Southern spent the morningdrifting between 42 3/4 and 43 1/2. Shortly after the noon hour the stockburst into activity and large volume. Does any sane person suppose that
Richard D. Wyckoff
a hundred or more people became convinced that Kansas City Southernwas a purchase at that particular moment?What probably started the rise was the placing of manipulativeorders, in which purchases predominated.Thus the sudden activity, the volume and the advancing tendencygave notice to the Tape Reader to "get aboard." The manipulator showedhis hand and the "get aboard" Tape Reader had only to go long with thecurrent.
Richard D. Wyckoff
The advance was not only sustained, but emphasized at certainpoints. Here the Tape Reader could have pyramided, using a stop closebehind his average cost and raising it so as to conserve profits. If hebought his first lot at 44, his second at 45, and his third at 46, he couldhave thrown the whole at 46 5/8 and netted $406.50 for the day if hewere trading in 100 share units, or $2,032.50 if trading in 50 share units.
CHAPTER VIIIThe Use of Charts as Guides and Indicators
MANY interesting queries have been received regarding the use ofcharts. The following is a letter representative of most:“Referring to your figure chart explained in Volume 1 of theMagazine of Wall Street, I have found it a most valuable aid to detectingaccumulation or distribution in market movements. I have been in WallStreet a number of years, and like many others have always shown askeptical attitude toward charts and other mechanical methodsof forecasting trends; but after a thorough trial of the chart on UnionPacific, I find that I could have made a very considerable sum if I hadfollowed the indications shown. I note your suggestions to operators tostudy earnings, etc., and not to rely on charts, as they are very oftenlikely to mislead. I regret that I cannot agree with you. You have oftenstated that the tape tells the story; since this is true, and a chart is but acopy of the tape, with indications of accumulation or distribution, as thecase may be, why not follow the chart entirely, and eliminate allunnecessary time devoted to study of earnings, etc?”Let us consider those portions of the above which relate to TapeReading, first clearly defining the difference between chart operationsand tape reading.
Richard D. Wyckoff
The genuine chart player usually operates in one stock at a time,using as a basis the past movements of that stock and following a moreor less definite code of rules. He treats the market and his stock as amachine. He uses no judgment as to market conditions, and does notconsider the movements of other stocks; but he exercises great discretionas to whether he shall "play" an chart signal or not.The Tape Reader operates on what the tape shows now. He is notwedded to any particular issue, and, if he chooses, can work withoutpencil, paper or memoranda of any sort. He also has his code of rules -less clearly defined than those of the chart player. So many differentsituatio ns present themselves that his rules gradually become intuitive -a sort of second nature evolved by self-training and experience.A friend to whom I have given some points in Tape Reading onceasked if I had my rules all down so fine that I knew just which to use atcertain moments. I answered him this way: “When you cross a streetwhere the traffic is heavy, do you stop to consult a set of rules showingwhen to run ahead of a trolley car or when not to dodge a wagon? No.You take a look both ways and at the proper moment you walk across.Your mind may be on something else but your judgment tells you whento start and how fast to walk. That is the position of the trained TapeReader”.The difference between the Chart Player and the Tape Reader istherefore about as wide as between day and night. But there are ways inwhich the Tape Reader may utilize charts as guides and indicators andfor the purpose of reinforcing his memory.The Figure Chart is one of the best mechanical means ofdetecting accumulation and distribution. It is also valuable in showingthe main points of resistance on the big swings.A figure chart cannot be made from the open, high, low and lastprices, such as are printed in the average newspaper.We produced a Figure Chart of Amalgamated Copper showingmovements during the 1903 panic and up to the following March (1904):
Richard D. Wyckoff
Price/Time Chart
It makes an interesting study. The stock sold early in the year at75 5/8 and the low point reached during the above period was 33 5/8.The movements prior to those recorded here show a series of downwardsteps, but when 36 is reached, the formation changes, and the supportingpoints are raised. A seven-point rally, a reaction to almost the low figure,and another sixteen-point rally follow.On this rally the lines 48-49 gradually form the axis and longrows of these figures seem to indicate that plenty of stock is for sale atthis level. In case we are not sure as to whether this is furtheraccumulation or distrib ution we wait until the price shows signs ofbreaking out of this narrow range. After the second run up to 51 thegradually lowering tops warn us that pressure is resumed. We thereforelook for lower prices.The downward steps continue until 35 is touched, where a 36-7line begins to form. There is a dip to 33 5/8, which gives us the fullfigure 34, after which the bottoms are higher and lines commenceforming at 38-9. Here are all the earmarks of manipulative depressionand accumulation -- the stock is not allowed to rally over 39 untilliquidation is complete. Then the gradually raised bottoms notify us inadvance that the stock is about to push through to higher levels.If the Figure Chart were an infallible guide no one would have tolearn anything more than its correct interpretation in order to make bigmoney.
Richard D. Wyckoff
Our writer says, "after a thorough trial of the chart on U. P. I findthat I could have made a very considerable sum if I had followed theindications shown". But he would not have followed the indicationsshown. He is fooling himself. It is easy to look over the chart afterwardsand see where he could have made correct plays, but I venture to say henever tested the plan under proper conditions.Let anyone, who thinks he can make money fo llowing a FigureChart or any other kind of a chart have a friend prepare it, keeping secretthe name of the stock and the period covered. Then put down on paper apositive set of rules which are to be strictly adhered to, so that there canbe no guesswork. Each situation will then call for a certain play and nodeviation is to be allowed. Cover up with a sheet of paper all but thebeginning of the chart, gradually sliding the paper to the right as youprogress. Record each order and execution just as if actually trading.Put my name down as covering the opposite side of every tradeand when done send me a check for what you have lost.I have yet to meet the man who has made money trading on anykind of Chart over an extended period.The Figure Chart can be used in other ways. Some peopleconstruct figure charts showing each fractional change instead of fullpoints. The idea may also be used in connection with the Dow Jonesaverage prices. But for the practical TapeReader the full figure chart first described“Any kind of a chart willis about the only one we can recommend.show some profits attimes, but the test is:How much money will itmake during a year'soperations?”
Its value to the Tape Reader lies chieflyin its warnings of important moves thusputting him on the watch for the momentwhen either process is completed and themarking up or down begins.
The chart gives the direction of comingmoves; the tape says "when."
Richard D. Wyckoff
The ordinary single line chart which is so widely used, isvaluable chiefly as a compact history of a stock's movements. If thestock which is charted were the only one in the market, its gyrationswould be less erratic and its chart, therefore, a more reliable indicator ofits trend and destination. But we must keep before us theincontrovertible fact that the movements of every stock are to a greateror lesser extent affected by those of every other stock.This in a large measure accounts for the instability of stockmovements as recorded in single line charts.Then, too one stock may he the lever with which the wholemarket is being held up, or the club with which the general list is beingpounded. A chart of the pivotal stock might give a strong buyingindication, whereupon the blind chart devotee would go long to hisultimate regret; for when the concealed distribution was completed hisstock would probably break quickly and badly.This shows clearly the advantage of Tape Reading over Charts.The Tape Reader sees everything that is goes on; chart player's vision islimited. Both aim to get in right and go with the trend, but the eye thatcomprehends the market as a whole is the one which can read this trendmost accurately.If one wishes a mechanical trend indicator as a supplementand a guide to his Tape Reading, he had best keep a chart composedof the average daily high and low of ten leading stocks in a group.First find the average high and average low for the day and makea chart showing which was touched first. This will be found a morereliable guide than the Dow Jones averages, which only consider thehigh, low and closing bid of each day, and which, as strongly illustratedin the May, 1901, panic, frequently do not fairly represent the day'sactual fluctuations.Such a composite chart is of no value to the Tape Reader whoscalps and closes out everything daily. But it should benefit those whoread the tape for the purpose of catching the important five or ten pointmoves. Such a trader will make no commitments not in accordance with
Richard D. Wyckoff
the trend, as shown by this chart. His reason is that even a well plannedbull campaign in a stock will not usually be pushed to completion in theface of a down trend in the general market. Therefore he waits until thetrend conforms to his indication.It seems hardly necessary to say that an up trend in any chart isindicated by consecutive higher tops and bottoms, like stairs going up,and the reverse by repeated steps toward a lower level. A series of topsor bottoms at the same level shows resistance. A protracted zigzag withina short radius accompanied by very small volume means lifelessness, butwith normal or abnormally large volume, accumulation or distribution ismore or less evidenced.Here is a style of hand chart especially adapted to the study of volumes:
Volume Figure Chart
When made to cover a day's movements in a stock, this chart isparticularly valuable in showing the quantity of stock at various levels.Figures represent the total 100 share lots at the respective fractions.Comparisons are ready made by adding the quantities horizontally.Many other suggestions may be derived from the study of this chart.
Richard D. Wyckoff
The proficient Tape Reader will doubtless prefer to discard allmechanical helps, because they interfere with his sensing the trend.Besides, if he keeps the charts himself the very act of running themdistracts his attention from the tape on which his eye should beconstantly riveted. This can of course be overcome by employing anassistant; but taking everything into consideration -- the division ofattention, the contradictions and the confusing situations which willfrequently result -- we advise students to stand free of mechanical helpsso far as it is possible.Our correspondent in saying "a chart is but a copy of the tape"doubtless refers to the chart of one stock. The full tape cannot possiblybe charted. The tape does tell the story, but charting one or two stocks islike recording the actions of one individual as exemplifying the actionsof a very large family.
CHAPTER IXDaily Trading vs. Longer-Term Trading
JUST now I took a small triangular piece of blotting paper three-eighthsof an inch at its widest, and stuck it on the end of a pin. I then threw ablot of ink on a paper and put the blotter into contact. The ink fairlyjumped up into the blotter, leaving the paper comparatively dry.This is exactly how the market acts on the tape when itsabsorptive powers are greater than the supply- large quantities are takenat the offered prices and at the higher levels. Prices leap forward. Thedemand seems insatiable.After two or three blots had thus been absorbed, the blotter wo uldtake no more. It was thoroughly saturated. Its demands were satisfied.Just in this way the market comes to a standstill at the top of a rise andhangs there. Supply and demand are equalized at the new price level.
Richard D. Wyckoff
Then I filled my pen with ink, and let the fluid run off the pointand onto the blotter. (This illustrated the distribution of stocks in themarket). Beyond a certain point the blotter would take no more. A dropformed and fell to the paper. (Supply exceeded demand). The more I puton the blotter the faster fell the drops. (Liquidation- market seeking alower level).This is a simple way of fixing in our minds the principalopposing forces that are constantly operating in the market-absorptionand distribution, demand and supply, support and pressure. The moreadept a Tape Reader becomes in weighing and measuring theseelements, the more successful he will be.But he must remember that even his most accurate readings willoften be nullified by events that are transpiring every moment of the day.His stock may start upward with a rush-apparently with power enough tocarry it several points; but after advancing a couple of points it may runup against a larger quantity of stock than can be absorbed or someunforeseen incident may change the whole complexion of the market.To show how an operator may be caught twice on the wrong sidein one day and still come out ahead, let uslook at the tape of December 21, 1908.“The Tape ReaderUnion Pacific opened below the previousmust be quick tonight's close:500 @ 1796000 @ 178 3/4…and for the first few moments looked asthough there was some inside support.Supposing the Tape Reader had…
detect such changes,switch his positionand go with thisnewly formed trend.”
BOUGHT 100 UNION PACIFIC AT l78 7/8…he would have soon noticed fresh selling orders in sufficient volumeto produce weakness. Upon this he would have immediately…
Richard D. Wyckoff
SOLD 200 UNION PACIFIC AT 178¼…putting him short one hundred at the latter price. The weaknessincreased and after a drive to 176 1/2, two or three warnings were giventhat the pressure was temporarily off. A comparatively strong undertonedeveloped in Southern Pacific as well as other stocks and short coveringbegan in Union Pacific, which came600 @ 176 5/81000 @ 176 ¾…then 177¼.Assuming that the operator considered this the turn, he would have…
BOUGHT 200 UNION PACIFIC AT 176 7/8…which was the next quotation. This would have put him long.Thereafter the market showed more resiliency, but only small lotsappeared on the tape.A little later the market quiets down. The rally does not holdwell. He expects the stock to react again to the low point. This it does,but it fails to halt there; it goes driving through to 176, accompanied byconsiderable weakness in the other active stocks. This is his indicationthat fresh liquidation has started. So he…
SELLS 200 UNION PACIFIC AT 176That is, he dumps over his long stock and goes short at 176.The weakness continues and there is no sign of a rally until after thestock his struck 174 1/2. This being a break of 6¼ points since yesterday,the Tape Reader is now wide awake for signs of a turn, realizing thatevery additional fraction brings him nearer to that point, wherever it maybe. After touching 174 1/2 the trend of the market changes completely.Larger lots are in demand at the offered prices. There is a final drive butvery little stock comes out on it. During this drive he…
BUYS 100 UNION PACIFIC AT 175 7/8
Richard D. Wyckoff
…and as signs of a rally multiply he…
BUYS 100 UNION PACIFIC AT 175 1/4From that moment it is easy sailing. There is ample opportunity for himto unload his last purchase just before the close when he…
SELLS 100 UNION PACIFIC AT 176 5/8Bought
Sold
Loss
Profit
178 7/8
178 ¼
62.50
-
176 7/8176 7/8174 7/8
178 ¼176176
87.50-
137.50112.50
175 ¼176 5/8Commissions and taxes
135.00
137.50-
285.00
387.50
Less Loss
- 285.00
Totals
Net Profit for the day
$102.50
This is doing very well considering he was caught twice on thewrong side and in his anxious trading paid $135.00 in commissions andtaxes.Success in trading comes down to a question of reducing andeliminating losses, commissions, interest and taxes.Let us see whether he might have used better judgment. His firsttrade seems to have been made on what appeared to be inside buying.No trend had developed. He saw round lots being taken at l78 3/4 andover and reasoned that a rally should naturally follow pronouncedsupport.
Richard D. Wyckoff
His mistake was in not waiting for a clearly defined trend. Ifwaiting for the buying was strong enough to absorb all offerings and turnthe market, he would have done better to have waited until this wascertain. When a stock holds steady within a half point radius it does notsignify a reversal of trend, but rather a halting place from which a newmove in either direction may begin.Had he followed the first sharp move, his original trade wouldhave been on the short not the long side. This would have saved him hisfirst loss with its attendant expenses, aggregating $89.50, and wouldhave nearly doubled the day's profits.His second loss was made on a trade which involved one of thefinest points in the art of Tape Reading -- that of distinguishing a rallyfrom a change in trend. A good way to do this successfully is to figurewhere a stock is due to come after it makes an upturn, allowing that anormal rally is from one-half to two-thirds of the decline.That is, when a stock declines two and a half points we can lookfor at least a point and a quarter rally unless the pressure is still on. Incase the decline is not over, the rally will fall short.What did Union do after it touched 176½? It sold at 176 5/8 –177 ¾ - 177 ¼ . Having declined from 179 1/8 to 176 ½, 2 5/8 points, itwas due to rally at least 1¼ points, or to 177 ¾ . Its failing to make thisfigure indicated that the decline was not over and that his short positionshould be maintained.Also, that last jump of half a point between sales showed anunhealthy condition of the market. For a few moments there wasevidently a cessation of selling, then somebody reached for a hundredshares offered at 177¼. As the next sale was 176 7/8 the hollow-ness ofthe rise became apparent.While this rally lasted, the lots were small. This of itself wasreason for not covering. Had a genuine demand sprung from either longsor shorts a steady rise, on increasing volumes, would have taken place.
Richard D. Wyckoff
The absence of such indications seems to us now a reason for notcovering and going long at 176 7/8.
It is very difficult for anyone to say what he would actually havedone under the circumstances, but had both these trades beenavoided for the reasons mentioned, the profit for the day would havebeen $421, as the 100 sold at 178 ¼ would have been covered at 1747/8, and the long at 175 ¼ sold out at 176 5/8. So we can see theadvantage of studying our losses and mistakes, with a view tobenefiting in future transactions.
As previously explained, the number of dollars profit issubordinate to whether the trader can make profits at all and whether thepoints made exceed the points lost. With success from this standpoint itis only a question of increased capital enabling one to enlarge his tradingunit.A good way to watch the progress of an account is to keep a bookshowing dates, quantities, prices, profits and losses, also commission, taxand interest charges. Beside each trade should be entered the number ofpoints net profit or loss, together with a running total showing just howmany points the account is ahead or behind. A chart of these latterfigures will prevent anyone fooling himself as to his progress. People aretoo apt to remember their profits and forget their losses.The losses taken by an expert Tape Reader are so small that hecan trade in much larger units than one who is away from the tape orwho is trading with an arbitrary stop. The Tape Reader will seldom takeover half a point to a point loss for the reason that he will generally buyor sell at, or close to, the pivotal point or the line of resistance.Therefore, should the trend of his stock suddenly reverse, he iswith it in a moment.
Richard D. Wyckoff
The losses in the above mentioned Union Pacific transactions(5/8 and 7/8 respectively) are perhaps a fair average, but frequently hewill be able to trade with a risk of only ¼, 3/8, or ½ point.The fact that this possible loss is confined to a fraction should notlead him to trade too frequently. It is better to look on part of the time; torest the mind and allow the judgment to clarify. Dull days will oftenconstrain one for a time and are therefore beneficial.The big money in Tape Reading is made during very activemarkets. Big swings and large volumes produce unmistakableindications and a harvest for the experienced operator. He welcomestwenty, thirty and fifty-point moves in stocks like Reading, Union orConsolidated Gas-powerful plays by financial giants.And this fact reminds us: Is it better to close trades each day, orhold through reactions, and if necessary, for several days or weeks inorder to secure a large profit?The answer to this question depends somewhat upon thetemperament of the Tape Reader. If his make-up be such that he canclosely follow the small swings with profit, gradually becoming moreexpert and steadily increasing his commitments, he will shortly "arrive"by that route.If his nerves are such that he cannot trade in and out actively, butis content to wait for big opportunities and patient enough to hold on forlarge profits, he will also "get there."It is impossible to say which style of trading would produce thebest average results, because it depends altogether upon individualqualifications, attitudes and tolerance of risk.Looking at the question broadly, we should say that the TapeReader who understood the lines thus far suggested in this series, mightfind it both difficult and less profitable to operate solely for the longswings. In the first place, he would be obliged to let twenty or thirtyopportunities pass by to every one that he would accept. The smallswings of one to three points greatly outnumber the five and ten-point
Richard D. Wyckoff
movements, and there would be a considerable percentage of losingtrades no matter how he operated.Many of the indications, such as the extent of reactions, lines ofresistance, etc., will be found equally operative in the broader swings,just as an enlargement of a photograph retains the lines of its original.Tape Reading seems essentially a profession for the person whois mentally active and flexible, capable of making quick and accuratedecisions and keenly sensitive to the smallest and almost imperceptiblesignals and indications.On the other hand, trading for the larger swings requires one toignore the minor indications and to put some stress upon the influentialnews of the day, and its effect upon sentiment; he must stand ready totake larger losses and in many ways handle himself in a manneraltogether different from that of the day trader.The more closely we look at the differences between the longerterm trader/investor and the day trader, the more the two methods ofoperating seem to disunite, the long-term investing player appearing bestadapted to those who are not in continuous touch with the market andwho therefore have the advantage of distance and perspective.There is no reason why the Tape Reader should not make longterm trading an auxiliary profit producer if he can keep such trades frominfluencing his daily operations.For example, in the previously mentioned shake-down inReading from 144 3/8 to 118, on his first buying indication he couldhave taken on an extra lot for the long swing, knowing that if the turnhad really been made, a rally to over 130 was due. A stop order wouldhave limited his risk and conserved his profits as they rolled up and thereis no telling how much of the subsequent forty point rise he might beenable to ride.Another case was when Steel broke from 58 3/4 (November,1908) to 41¼ in February.
Richard D. Wyckoff
The market at the time was hinging on Steel and it was likely thatthe Tape Reader would he operating in it. His first long trade under thisplan would be for at least a hundred shares more than his usual amount,with a stop on the long pull lot at say 40 3/4. He would naturally expecta rally of at least 8 3/4 points (to 50), but would, in a sense, forget thishundred shares, so long as the market showed no signs of anotherimportant decline.When it reached 60 he might still be holding it.The above are merely a couple of opportunities. Dozens of suchshow themselves every year and should form no small part of the TapeReader's income. But he must separate such trades from his regular dailytrading; to allow them to conflict with each other would destroy theeffectiveness of both. If he finds the long pull trade interfering with theaccuracy of his judgment, he should close it out at once. He must play onone side of the fence if he cannot operate on both.You can readily foresee how a trader