broke down through 200.  I sold 100 shares at 199 15/16,losing a finger or two in the process.
Back to the balcony I go.  How can this be?  It is a great day, and I am downalmost $900.00.  I felt like I should have been up $5,000.00 for the day asORCL, CSCO, SUNW and the like were up significantly from their openingprices, and here I was, losing money.  I needed to make a good trade.
MU topped at 126, pulled back to 122 3/8, and was moving back up.  Ibought 100 shares at  124  11/16.  I placed a stop loss at 122  1/8, just belowthe  122 3/8 lows.
MU had a very attractive pattern on the daily chart.  It was up on big volume,
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MU trades as high as  131  7/16.  My trailing stop was placed at 129 3/4.  Thestock reversed back down through  130 and activated my stop.  I sold  100shares at  129 3/4.  A little smile crossed my face. I needed that one.
While  I  was  in MU,  I  bought  AMAT when  it pulled  back  from  the  high at106.  I bought  100 shares at  103 3/8, and I sold  100 shares at  103 3/4.  Icouldn't let  this one turn  into a  loser.
AMAT took out the top at 106, but couldn't muster a real run.  It traded backdown, and 1 sold 200 shares at  105  1/16.
AMAT started to move back up, and I thought it could challenge the day'shigh at  106 and possibly the 52^week high at  110.  I bought 200 shares at103  5/8.  My price target was  106 -  110, and I placed a stop loss a  102 5/8.
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AMAT was challenging the top  again.  I bought 200 shares  at  105  15/16.The stock failed to take out the top  at  106  3/8  and started trading lower.  Isold  200  shares  at  1053/4.
BGEN showed up in my Pullback Scan.  It has pulled back more than 50%from its 52-week high and was moving higher, on higher than averagevolume.
The stock went as high as 70  1/2.  I moved my stop loss to 69  1/2.  The stocksold off and my stop was triggered.  I  sold 200 shares at 69 3/8.
I bought 200 BGFIN at 69 1/8 as it broke out to a new intraday high.  I placeda stop loss at 68  1/2.
BVSN also showed up in my pullback scan.  The stock has pulled back 60%from its 52-week high and was rebounding on higher than average volume.
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1 bought 200 shares at 50.14, and I added  200  more shares at 50 7/16  as thestock broke out to a new intraday high.
I was bringing up semiconductor stocks on my watch  list.  TXN  was  tryingto  move  over  its  50-day moving average.
BVSN had momentum behind it.  It reached 52 and hesitated for a second.  Isold  200  shares  at 52.  The  stock  then went up  to 53  1/2  and pulled back.  Iwas  giving  it some wiggle room.  The stock attempted  to  take out the  53level again at 3:10, but failed to so.  It started to sell off.  I sold the remaining200  shares  at 51  1/8.
I  bought  150  shares of TXN  at  149  1/2  as  the  stock  penetrated through theprevious  top  at  149.  I  was  expecting TXN  to  challenge  the  top  price  of 152and  possibly  break  out.
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day's  low,  then after that extreme bounce,  we  are  continuing  to  trade  higher.
The  SOX  (Semiconductor  Sector  Index)  has  been  outperforming  the  marketfor a while.  I  felt that more  money was  going to  go  into  this  sector as  it  isseen  as  a  safe  heaven  for many  investors.  The  index  was  at  1140,  and  I  ex-pected  it  to  go  to  1200  -  1250  over  the  next  few  days.  This  would be  a5% - 8% move.
The  SOX broke  out  to  a  new  intraday high.  At  this  point  I  was  entering  thefollowing  five  stocks  to  create  my  basket:  NVLS,  LSI,  MOT,  PMCS,  andVTSS.  Keep  in  mind,  that I  will  be  trading  these  five  slocks  in  direct  rela-tionship  to  the  SOX.
TXN went  as  high  as  152.  It was  having problems  at  that  level,  and  it mayhave  formed a  double  top.  I  sold  my  150  shares at  151  11/16.
Basket Trading
One  of the strategics  I  use  in  my trading  is  to  find  the strongest  sector andbuy  the  strongest  stocks  in  that  sector.  I  try  to  create  a  "basket"  of stocksthat will  both  outperform  the  market  and  the sector they  belong  to.  For mystock selection criteria,  1  simply look for the most known  liquid  names.  Hereis  how  I manage a  basket position.  As  the  index goes  up,  I sell  the stocks  inthe basket that are going down or arc  flat.  This permits me to stay  in  onlythe  stocks  that are going up.  When  the  index  turns  down  and violates  sup-port levels, I will  liquidate the entire basket.  Since 1  hold a group of stocksin  the  same  sector,  my  position  window,  which  updates  dynamically  withevery  tick,  gives  me  a  "real-time"  view  of what  is  taking  place.  My  openP&L  tracks  the  changes  in  bid  prices  for  the  entire  basket.  In  many  cases,the  trade  management  of a  basket  would  also  be  dependent  on  both  the  num-ber  of the  stocks  in  the  basket,  which  can  be  as  high  as  20,  and  the  timeframe  for  the  trade.
By this point  in  the  day,  I  had  turned  the  day around,  and I  was  up  about$700.00.  That second  break  on  the  balcony really  helped,  and  I  felt  as  if Ihad  the  market  in  the  palm  of my hand.  I  was  extremely bullish  at  this  point,because  the  Nasdaq  has  come  down  28%  from  the  high  on  3/24/00  to  yester-
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I bought 200 shares of NVLS at 53 3/8, and another 200 shares at 53  17/32.
I bought  100 shares of MOT at  145  7/8.
I bought 200 shares of LSI at 69  1/2 and another 200 shares at 69 9/16.
I bought  100 shares of PMCS at  174.39.
I bought 200 shares of VTSS at 90  9/16.
I was watching the SOX very carefully.  My basket was doing well, and Iwas up over $ 1,400.00 on my various positions.  My plan at this point was tosell half of my basket if the SOX hits  1215, and let the rest ride.  My stoploss on the position was if the SOX broke below  1140.
The first stock I sold was VTSS.  I actually sold it before the SOX brokedown, because it was under performing the basket.  I sold 200 shares at 89.
A trading system is made of rules and guidelines which you must follow re-ligiously. There are no exceptions!  The SOX peaked at  1180, and started totrade down.  I have raised my stop loss to  1155 and as it broke through thesupport at 1155,1 started to sell my positions.
The second stock I  sold was NVLS.  I  sold 200  shares at 53  5/8  and 200shares at 53  3/8.
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I entered a market order to sell  100 MOT.  The bid was  145  1/4 at the time.However, the specialist saw the selling pressure coming, so he opened up thespread.  I sold  100 shares at  144  1/4.  I wasn't very happy about this one.
I entered two orders to sell 200 shares of LSI at the market.  I sold 200shares at 69  1/8, and 200 shares at 69 3/16.
The basket trade did not work out in this case.  I was not upset that I was up$1,400 and ended up with a loss.  On a percentage basis, the total wiggle of$2,100, from the high value of the basket to the sale price of the basket iscompletely normal.  In the past, basket trades like this have yielded me greatreturns.  The secret is that you have to be right and sit tight.  The only thingthat bothered me was that I still felt we were going higher over the next fewdays, and I just lost my position.  However, risk management and moneymanagement rules must be followed, no matter what my gut feeling tells me.This is the difference between a gambler and a professional trader.
I sold  100 PMCS at  173.
AMAT is also in the semiconductor sector.  It sold off really hard  from  110to  104  1/2.  It then bounced, and I bought 200 shares at  105.98.  I placed astop loss at  103  1/2.  My price target was another run to the top tomorrow.
NVLS did not sell off as hard as the rest of the market.  It was a sign ofstrength, so I bought 300 shares at 52  13/16.
Great traders never look back at what happened lo a losing trade aflcr theyexit it.  RMBS was my pick of the day.  I traded it three times in the morningwithout any success.  In  fact my  last exit was practically the low of the day.After the third trade on RMBS  was completed,  I simply took it off my trad-ing screen, so I didn't see what took place later in the trading day.
RMBS went as high as 248  1/2 after I sold it at  199  15/16.  Things like thathappen all the time, and it doesn't really matter where a stock goes after Isold it, because I have to execute my trades at my exit prices regardless  if Iam right or wrong in my analysis.  If I don't have exit prices planned in ad-vance, including stop loss and price targets, then I am not a professionaltrader.  If things like this drive you crazy, go back to Day Five and look at allthe positions I sold that day.  If I was still holding these positions right now,I would be down $17,575  from the price I  sold them to the closing prices oftoday.  I hope you are getting my point.  The reason I have included a chartof RMBS in this section is not to say, "I was right in my initial analysis andhere is the proof.  See, RMBS went up to 248  1/2," but to bring up the im-portance of adhering  to  your trading  system and risk management rules.  Thething that drives me crazy about traders is that they always tell you about agreat pick they had, and how they have left so much money behind.  It is al-ways about how much money they leave behind.  I used to participate inthese conversations myself, and I would share my grief about the trades  thatgot away from me.  In fact, I would even do so unintentionally while teach-ing a seminar.  Now, every time I am about to tell a story about a trade thatgot away from me, I take a deep breath, and I tell myself, "No one really ca-res! "  As  they say,  "Misery  loves  company."  You might be  in pain  for  let-ting a big winner go early, and you feel you have to tell the world about it.  It
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is  not going  to  get you  anywhere.  Stop  feeling sorry for yourself.  It is  im-possible to  be right all  the time.  When you are right and you  have not capi-talized on  being right,  you  are simply wrong.
One  of my  dear friends  bought  XYZ  stock  at  70.  The  stock  went up  to  85,and  he sold  it.  He never told  me he was in  the stock prior to him selling it,and  after the  stock has  already declined  back to  75.  He  was  so proud  of him-self,  because he bought  it at 70 and sold  it at 85,  especially after the stockdropped back to 75; consequently, he did everything right.  Me then said tome,  "keep  an  eye  on  it and  buy it  if it  trades  higher than  85.  I have  a stopbuy  order on  it at  85  1/2  myself."  I never really  followed  XYZ stock;  how-ever,  every  time  I spoke  with  my  friend he would  say,  "did  you  see  XYZstock  today?  It  went up  a  couple  of bucks.  It  is  my pick of the  year!"  A  fewmonths  go  by,  and XYZ stock  took out  the  85  level.  It was now at  180.  Mybuddy  is  glowing.  "I  told  you,  it  is  my pick  of the year," he says.  XYZ goesup  to  240 and announces  a 3  for  1  stock split.  "It is my pick of the year," mybuddy says.  The slock  ten  folds,  it was a great pick.  My buddy was right.
No!  He was wrong!  Although  he  made a great call,  he never bought XYZback  once  it  hit  his  buy target!  It  was  his pick  of the  year,  and  he has  zerodollars  to  show  for it.  Moral  of the story,  put your money where  your mouthis.  Do  not use  the  "I  should  have  done  ..."phrase.  Only speak  about youractions,  learn from your profits and losses.
The  final  bell  rang and  the Nasdaq  closed up 20 points  for the day.  The  in-dex  gave  back most of today's  gains,  but still  managed  to close up  143points  from  the open.  It was a very busy trading day for me.  The technicalproblems this  morning set the tone for the day.  It was a roller coaster ride inwhich  I  finished the day pretty much even.  I was very optimistic,  trying tolet p r o f i ts ride; however, it proved to be very costly.  I still managed all openpositions according to all my risk management rules.  Unfortunately, it didnot yield  big dividends  today.  I  felt comfortable  to  hold NVLS  and AMATovernight.
Open  positions:  300  NVLS,  200  AMAT.Total  profit  for 4/5/00:  -$83.08
Sitting Tight
DAY FOURTEEN
Thursday,  April  6,2000
The  futures  were  up  sharply  this  morning,  and  I  watched  in  envy the  pre-market  trading of my "basket,"  as  it was  trading sharply higher.  I  was  hold-ing  two  semiconductor  stocks  overnight,  NVLS  and  AMAT.  Unfortunately,NVLS  announced  that  they  would  offer  stock  for  sale  to  raise  500  Milliondollars.  Consequently,  it was  practically  flat  in  pre-market  trading,  whichshowed  weakness,  because  most  semiconductor  stocks  were  trading  upsharply.
I  decided  to  sell  my  position  in NVLS  before  the  opening  bell.  I  sold  300shares  at  52  15/16.
NVLS  opened  at  53  and  fell  down  hard.  The  street  was  not  treating  NVLSthe  same  way  other  stocks  in  the  same  sector  were  being  treated  today.  Thelack  of strength  pre-market  was  a  clear  signal  to  get  out.
Unlike NVLS, AMAT gapped up and ran from the open.  I was sitting tightin this trade.  I wanted to give AMAT a chance to breakout to a 52-weekhigh.  Once AMAT hit  109, I moved  my stop  loss to  107 3/4.  I felt that the108 level should hold, but it didn't.  AMAT traded down and triggered mystop  loss.  I sold 200 shares at  107  1/2.
XRX ran  from  the open.  It topped at 26  5/16,  then  it went down  to  25  3/4where it  found support.  It bounced back up to 26, which presented some re-sistance  for the stock.  As soon as the offer on the stock went up  to 26  1/16,I  entered three  limit orders  to buy 300 shares.  One was priced  at 26  1/16,one was priced  at 26  1/8,  and  one  was  priced at 26  3/16.  To  my great sur-prise,  I  had  all  three  orders  filled  at  26,  so  I  bought 900  shares  of XRX  at26.00.  My price  target was  28  -  29,  and  I placed  a stop  loss  at  25  11/16.
I have had XRX on my Constant watch  list for a while.  Today, I noticed thatXRX  seem  to  have  bottomed  two  days  ago  and  is  now trading up.
XRX topped at 26  3/4.  I remembered  how fast things  turned  around yester-day,  so  I  moved my stop  loss  for 600  shares  to  26  7/16.  XRX  traded  lowerand  activated my stop.  I  sold 600  shares  at 26  7/16.
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After I  sold  2/3  of my XRX position,  it traded as  low as 26  1/4.  It  thenmoved  back  up  and  went  as  high  27  1/16.  There  was a  lot of resistancethere.  The stock tried to take that price level out again, but was failing to doso.  I  didn't like the signs of weakness,  so I sold my last 300 shares at 27.
Indeed,  it was  a  mistake.  I  had  to  give  the  trade a  lot more  wiggle room,than I would give a trade that was entered on a pullback.  As VTSS pulledback  and  traded  under 90,1  sold  100  shares  at  89  15/16.
Once  VTSS  bounced  back  up  from  89  3/8,1  bought  100  shares  at  90.  Myprice  target  was  92  -  95,  and  I  placed  my  stop  loss  at  89  1/4.
VTSS  broke out to  a new  intraday high.  I  bought  100 shares  at 92  5/16.This  was  a  pure  reaction  trade  on my part,  to a stock  that was  running.  Nor-mally this is a BIG mistake.  But the excitement of getting in on a nice rungot the best of me and I jumped in without thinking.
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CHKP  is  on  my Constant watch  list.  It has been moving back up  after a  55%pull back in price.  It was trading at the high of the day, and I  fell that thestock could  go  back up  to  the  high  190's.
VTSS  traded  up  to  90  3/4.  It was  in  a  trading channel  between  89  3/4  to90  3/4.  RSSF was  the Ax  on  (he stock.  He  was  at  the  inside  offer the  entiretime.  Another interesting  thing was  that BTRD,  which  is an ECN,  was  con-stantly at the inside offer as well.  It is  normal  to have an ECN  at the insidemarket;  however,  BTRD  would  be  the  only  one  at  the  inside  showing  100shares  for sale.  What caught  my attention was  that thousands  of shareswould  trade at that price,  and BTRD was  still  showing  100 shares.  How canit  be?
Actually, it happens all the time.  There is a fascinating way to deceive trad-ers  who  use  Level  II  quotes.  Let's  say  I  wanted  to  sell  10,000  shares  of XYZstock.  I  can  place  a  RESERVE  order  on  ARCA  to  sell  10,000  XYZ  stock  at33, showing only  100 shares at a  time.  My order is  hidden.  If anyonelooked at the Level  II montage, they will see  100 shares are available on theoffer at 33  on  the  ARCA  ECN.  These  100 shares,  can  trade over  100  times.l O Ox  100=  10,000.
Since  I  noticed  that  there  was  an  obvious  seller on BTRD using reserve  or-ders  to  hide his hand,  I  decided to  get out of the  trade.  I  sold  100 shares  at89  13/16.
CHKP  bounced  at  the  169  level,  which  looked  to  be  a  decent  support  levelfor the stock.  I bought  100 shares  at  170  7/8.  My price  target was  180 -  195.I  placed a stop  loss at  168  1/2.
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The stock traded up all  the way to  177  1/2.  I raised my stop  loss to  171.  Iwas going to give this trade the wiggle room  it needed as I was a believerthat CHKP could easily reach 200 and possibly 220.  Was greed clouding mybetter judgment?  Yes!  CHKP pulled back down and activated my stop loss.I sold  100 shares at  170.47  I wasn't upset at all.  I wanted to give a volatilestock a chance to make me big money, and I ended up sacrificing a few hun-dred dollars of paper profit for that potential reward.
PHCM broke out to a new intraday high.  I bought  100 shares at  127  1/4.My price target was  160.  I placed a stop  loss below today's  low at  116  1/2.I was going to give PHCM some real wiggle room.  I felt I was right and Ishould sit tight.
PHCM showed up on my Fullback Scan.  It has pulled back over 55% fromthe highs set 3/10/00.  I thought the stock could bounce back up to140-  160.
There were a  lot of buyers  in the stock and one  very serious  seller.  HMQTwas a very active Ax.  He sold the stock so hard that it almost took the lowof the day out.  Lucky for me,  it didn't.  The stock bounced up,  and I boughtanother  100 shares at 124  1/8.  The market was in strong rally mode into theclose.  However, HMQT was  selling PHCM hard.  He did not let the stockrun with the market.  He had to sell today.  I have seen many of these inci-dents  happen,  but I  was  not going to  let HMQT shake  me out of my position,no way!  PHCM closed at  118  and was trading at  122 -  125  in after-hours ac-tion,  f wasn't worried.  I had my money where  my mouth was.
The bulls won the battle today as the Nasdaq closed in the green two days ina row.  When the final bell rang, the index was up 98 points from yester-day's close.  Let's see if we can make it three days in a row, bouncing off theextreme intraday low we h it on Tuesday.  I am sitting tight in my PHCM po-sition.
Total profit  for 4/6/00: $577.00Open positions: 200 PHCM
Thank God It's Friday
DAY FIFTEEN
Friday, April 7, 2000
I  felt very tired  this  morning.  It has  been  a  long week,  and 1  was  looking  for-ward to the weekend.  The sentiment in the street was very bullish.  The mar-ket gapped up open and my overnight position looked promising.  I wassomewhat concerned about next week, which will be the official kickoff ofthe earnings season.  I wrote in my notes for today not to carry any positionsover the  weekend.
PHCM had a nice run from  122 to  136  1/2.  It pulled back to  131.  I was sit-ting tight.  The stock made another run from  131  to  135.  I didn't like the factthat the stock could not reach the top, so as it pulled back from  135,1 sold1/2  of my position,  100  shares at  133  5/8.  At  12:15  PM,  PHCM went up  to136  1/2 again and couldn't make a higher high.  At  12:35  PM, it hit  136  1/2for the third time today and couldn't penetrate through.  HMQTwas back atthe inside offer.  Since  136  1/2 was a major resistance level for the stock, 1sold  100 shares at  134 3/4.  I didn't like the downside risk at this point.
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Once I closed my PHCM position, I decided to call  it a day and end theweek.  I was very happy with my results  for the week.  I did not see anysetup that I wanted to trade, and I wasn't going to risk having a bad traderuin my weekend.  I wanted to start next week on a strong note, taking offthe profits made on my last trade and the entire week.
Open positions: NoneTotal profit for 4/7/00: $1,689.10
Ding!  Ding!  The weekend is here signaled the closing bell.  The bulls wonagain, and the Nasdaq was up  178 points from yesterday's close.  The Thirdweek of the challenge was over.  It was a great week in which I was able tocapitalize on some great opportunities.  On Monday, I started the week trig-ger happy, and I ended up basically flat.  The Nasdaq was down 349 pointsthat day, so 1 was very happy that I didn't lose a lot of money.  Tuesday wasa record volatility day.  After I had two losers in SUNW and CIEN, I was  fi-nally able to have a good entry on ORCL, CIEN and CSCO.  I ended the daywith big profits.  On Wednesday, I had technical difficulties and frustrations,which were costly.  I was able to turn the day around, but I gave it all backon my basket trade. Thursday was an average day with the regular winnersand  losers.  On  Friday, I closed  my overnight PHCM position  and closed theweek with a big winner.
My total profits for week three were $5,826.86.  I  faxed MB Trading a re-quest for a check in the amount of $6,000.00.  After all,  Friday is payday!
After-Hours Trading
DAY SIXTEEN
Monday,  April  10,2000
I had a very interesting weekend with my family.  My sixteen-year-oldbrother came to visit me.  He is a junior in high school, and he is trying tomake the  football team for his senior year.  The T-shirt he was wearingcaught my eye.  It said,  "Play to  win or get off the  field."
We were talking about his experiences in training camp, and I was admiringthe will power and discipline my brother has been demonstrating.  He is de-termined to make the team this year, but above all, he has faith that he will.  Iwas amazed to hear about the physical and emotional  pain his peers have togo  through as they are trying to fulfill their dream of dressing up on Fridaynight and having their number called to get on the field for the next play.
I  felt it was pure.  There was no  money on the line to  motivate these youngsouls; however, there  is nothing they want more  than to be  on the  team andplay to win.  They will  give their heart and soul  in their effort to be the bestthey can be.  I