, 12CBS.Marketwatch.com, 139Chemical index (CEX), 121, 123CNBC, 168–170Comparative Relative Strength,51–52Continuation signals, 81–83Flag, 82–83Isosceles Triangle signal,81–82Pennant, 83Crossovers, 59–61Daily trading plan, 149–153Datek Online, 129, 130Day orders, 131Day trading, 29, 97, 98–99, 106,113, 114, 121, 136, 145market structure indicatorsand, 43–44typical case examples,167–180Descending Triangle (reversalsignal), 79–80
209
Roth_0471394211_ind.qxd
11/2/00
8:53 AM
Page 210
indexDiscipline, 148, 152Distribution phase, 16, 17,18–19, 73Double Bottom (reversalsignal), 77, 78Double Top (reversal signal),77Dow Jones averages, 8, 68–69,122, 125, 170Dow Theory, 68–69ECN Island, 137Electronic Direct AccessTrading ( EDAT ), 110–115Exit strategy, 36–37Extended hours, 131Fading the opening, 183–185Fair Value, 47, 48, 169Flag and Pennant signals,82–83Floor specialist short sales,44Flow-of-funds indicators, 45Fool.com, 139Gap, shorting the, 183–185Golden Rules of StockTrading, 1–12, 22, 24,148, 181–185losing positions (neveraveraging down), 3, 9–11,12losses (cutting), 3, 4 –6, 12profits ( letting run), 3, 6–7,12techniques that involvebreaking, 181–185
trend (trading with), 3, 7–9,11–12, 22, 170Good-Till-Cancelled orders,131Granville, Joe, 69Greenspan, Alan, 178Group indexes, 121, 123,170–171Head and Shoulders (reversalsignal), 76–77Index(es):Arms, 50chemical (CEX), 121, 123group, 121, 123, 170–171Major Market ( XMI ), 123oil ( XOI ), 121, 123option, 123–124S&P 100 (OEX), 125S&P 500, 122Trader’s ( TRIN), 50–51, 122,175Indicators, 41–70, 122ACPS (average cents pershare), 56advances vs. declines,49–50basic types of (three),43–44candlesticks, 61–68comparative relativestrength, 51–52crossovers, 59–61cycles, 45displaying on screen, 121flow-of-funds, 43–44, 45list of, 122
210
Roth_0471394211_ind.qxd
11/2/00
8:53 AM
Page 211
indexmarket structure, 43–44,45 –59On Balance Volume (OBV ),69–70oscillators, 52–56price, 45, 57–59sentiment, 43–44S&P cash to futuresrelationship, 45 –48Trader’s Index, 50–51volume, 45Information services/sources,120–121, 133–143Internet. See OnlineIsland ( isld.com), 137Isosceles Triangle signal,81–82Johnson & Johnson (JNJ: caseexample), 161–167Kinematic Model, 13–39accumulation phase, 16–17,18–19, 27–28Break High, 27, 28, 29, 31,32Break Low, 30, 32buy signals, 27, 29diagram of, 15distribution phase, 16, 17,18–19downtrends, 35, 36limitations of, 43pent-up demand, 20price markdown phase, 16,18, 33price markup phase, 16, 18,33
Rally After Climax, 25Reaction after Climax, 20, 21sell signals, 30Shake-Up-Fake-Out-Beforethe-Breakdown, 33, 58Shakeout-Fake-Out-Beforethe-Breakout, 30, 31, 33,34waypoints on, 19Limit order, 129–130Losing positions, neveraveraging down (GoldenRule), 3, 9–11, 12Losses:cutting (Golden Rule), 3, 4 –6,12learning from, 189Luck, 191MACD oscillator (movingaverage convergencedivergence), 55 –56Major Market Index ( XMI ),123Marketguide.com, 139Market structure indicators,43–44, 45 –59Merrill Lynch (case example),178–180Mistakes, minimizing cost of,4 –6Monitor setup, 117–125Morgan Stanley Dean Witter(MWD), case example,157–161Moving averages, 54Mutual funds, 44
211
Roth_0471394211_ind.qxd
11/2/00
8:53 AM
Page 212
indexNasdaq indicators, 122News/analysis, legitimate vs.misinformation,142–143NYSE indicators, 122Odd lot short sales (sentimentindicator), 44Oil index ( XOI ), 121, 123Omega Research’s ProSuite2000i, 140–141, 142On Balance Volume (OBV ),69–70Online:brokers, 127–131, 138, 139information sources,133–143monitor setup, 117–125trading simulators, 138trading stocks, 107–115Options, 124 –125Orders:day, 131entry screens, 120, 129Good-Till-Cancelled orders,131limit, 129–130market, 129stop limit, 129, 130–131stop market, 129, 130time frame, 131Oscillators, 52–56Overnight trader, 29, 97,99–100, 106Pennant, 83Personal trading systems,145 –148
Position trader, 29, 97, 101–104,105Price movement:interaction between supplyand demand, 39Kinematic Model of, 13–39Price/volume ( indicators),57–59Profits, letting run (Golden Ruleof Trading), 3, 6–7, 12Psychology, 10, 21, 44Put/call ratio (sentimentindicator), 44Quick Quote, 61, 89, 91Quote screens, 120–122RagingBull.com, 139Regulation T margins, 113Relative strength (RSI ), 54, 88,91, 94, 151, 161–163Resistance, 21, 33Reversal signals, 73–81Sandbox.com, 138Scalpers, 99Screen setups, 117–125Sentiment indicators,43–44Shake-Up-Fake-Out-Before-theBreakdown, 33, 58Shakeout-Fake-Out-Before-theBreakout, 30, 31, 33, 34“Shorting the gap,” 183–185Short sales, 44Short signals, major, 89–94Smith, Garry B., 136–137Software, 140
212
Roth_0471394211_ind.qxd
11/2/00
8:53 AM
Page 213
indexStandard & Poor’s:cash to futures relationship( indicator), 45 –48,169–170futures contracts, 122options index (OEX), 125S&P 500, 122, 170Stochastic Oscillator, 54, 88, 90,94, 151, 161–163Stock order screens, 129Stock phases ( four)(accumulation/distribution;price markdown/markup),16Stock trading. See Traders;TradingStops, 36–37, 38, 129, 130–131Supply/demand, 39, 57Support line, 21, 32Swing trader, 29, 97, 100–101,104 –105, 106, 158, 161System, trading, 145 –148Tel Mexico ( TMX), 175, 176,177, 178TheStreet.com, 136–137, 138Traders, 95 –106attributes essential for( knowledge anddiscipline), 10–11day, 29, 97, 98–99, 106four main types of, 29“idiots” and “completeidiots,” 190knowledge more valuablethan profit for, 189overnight, 29, 97, 99–100,106
position, 29, 97, 101–104,105swing, 29, 97, 100–101,104 –105, 106Trader’s Index ( TRIN), 50–51,122, 175Trading:attitude and, 190buy/sell signals, 27, 29,85 –94cutting losses, 3, 4 –6, 12daily plan, 149–153EDAT, 110fading the opening, 183indicators, 41–70Kinematic Model, 13–39learning from every trade,189letting profits run, 3, 6–7,12monitor/screen setups for,117–125nature of (serious, hardwork), 191never averaging down losingpositions, 3, 9–11, 12online, 107–115, 127–131online information sources,133–143personal broker, 110post-close activity, 152post-opening activity, 152practicing (without money),190pre-opening activity,151–152rules for (see Golden Rules ofStock Trading)
213
Roth_0471394211_ind.qxd
11/2/00
8:53 AM
Page 214
indexTrading (Continued)shorting the gap, 183system for, 145 –148techniques that break therules, 181–185three basic ways to buy/sellstocks, 110with trend, 3, 7–9, 11–12, 22,170trend signals(continuation/reversal),71–83typical cases, 155 –180American Airlines (AMR),167–174Johnson & Johnson (JNJ),161–167Merrill Lynch (MER),178–180Morgan Stanley Dean Witter(MWD), 157–161Tel Mexico ( TMX), 174 –178Transports Average ( Dow),68–69, 122Trends, 71–83confirmation of, 75continuation signals, 81–83daily plan, checking postopening, 152
indicators (“how to stalk atrend”), 41–70Kinematic Model and, 15market structure indicatorsand, 47markup and markdownphases as, 34reversal signals, 73–81trading against in rising market(“fade the opening” or“short the gap”), 183–185trading with (Golden Rule), 3,7–9, 11–12, 22, 170Triple Bottom (reversal signal),78, 79Triple Top (reversal signal),78–79Utility Average ( Dow),68–69–122Volume indicators, 122Wallstreetcity.com, 139Yahoo!Finance, 136
214
<|end|>