Day Trade Part-Time: April 2009

+ Stock Trading Notes from Books and Personal Expierence +

A bird in the hand is worth two in the bush. Ie: It's better to have something small and reliable than something big and risky.

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Also see Market Notes #2 file

Setup Trade Entry - Section 0.0

Use Daily - Section 0.1

Useful Links/Info Sources - Section 0.2

Gen Notes on Trading/Dos/Donts Etc - Section 0.3

Strageties at the very end of 0.3

Futures Info - Section 0.4

Forex - Section 0.4b

Options Options Options - Section 0.5

Lingo and Definitions - Section 0.6

Ral's Methods - Section 0.7

Client Software/Site Notes - Section 0.8

Tax Considerations/Notes - Section 0.9

Most recent notes at the top or marked with *n*

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-B Thankful for technology and all this other lazy dang in life

"If I had my life to live over again, I would elect to be a trader of goods rather than a student of science. I think barter is a noble thing. I need to know more about it."

- Albert Einstein

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######### Use Daily: - 0.1

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Setup Review Questions

What triggered break out?

What was the moment of impact?

Was it foreshadowed by longer time frame?

Where were the resistances/supports?

Stochastics directions?

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######### Setup Entry: (See trader cheat sheet) - 0.0

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0) Gauge the noodles/qqqq/dia/futures/^vix/^sox/trin (wait a few min into open)

1) Premise - Have an explained ETS plan for each trade (Entry Target Stop) Pick reasonable trigger!

If you have no visable target then your premesis failing is your target. But u can always use stinky/sticky$5s/250s

2) Check for previous supports via price, piviots, candels, fibonacci, grids, MSH, MSL, gap windows

3) Always make sure risk reward ratio is atleast 1:2 (If stop is 50 cents below entry, make sure target is $1 above entry)

4) Explain the trade to your self, a friend our out loud

5) Make sure your reasons are logged in the journal

6) Review losing/winnings trades at the end of day

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######### Useful Links & Reading: - 0.2

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Island L2: http://www.marketcenter.com/std/toolbox.jsp

Strategy: Check Mozilla & Active Desktop bookmarks fool

Mad Dogs news service: Premieum has retal reports etc.. Use this URL if you want to sign up for $19 a month instead of $29 http://www.briefing.com/GeneralContent/Active/Signup/NewUserTrade2Win.aspx?Source=Trade2Win

Equipment:

Hardware deals/specials recomended by kg:

fatwallet.com

slickdeals.com

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######### Trading General Notes/Strategy: - 0.3

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* POWERSWINGS.COM Teresa Notes: (10/06/06 added-not printed)

-Diversify. Spread your bets around. It’s the only way to be on board the winner.

-Dont risk more then 1% of account. Start small. Keep stops

-Without volume you have nothing. A move uphill can not last without the accellerator pedal (volume!) Need to pay more attention to volume.

If prices are falling but volume is also dropping/slowing then the selling pressure will be over soon

-Sell into climax dont buy tops, vice versa on shorts

-When the spread widens it usually denotes higher activitiy/liquidity

-Decreasing volume on up or down bars/trends indicate their is no professional interest in this move

-Gauge lack of demand in a stock by volume!! You cant have good rallys with no demand

-A professional trader isolates himself from the ‘herd’ and becomes a predator rather than a victim. He

understands and recognises the principles that drive the markets and refuses to be mislead by good or bad

news, tips, advice, brokers, or well meaning friends. When the market is being shaken-out on bad news, he

is in there buying. When the ‘herd’ is buying and the news is good, he is looking to sell.

-DECENT 5M CANIDATES: OIH, SLB, AHC, PD, ACI, BTU, ES, VLO, TSO, YM, AB, SUN

Method to pick: Look for high volitatilitiy stocks, high priced stocks, high atrp and atrw. Use esig volitality picker layout

http://powerswings.com/2006/07/02/teresa-on-timeframes/

* UNDERGROUNDTRADER.COM & BOOK Notes: (11/02/06 added-not printed)

:Stock Specific:

-QCOM: Every time they up guidence they gap premarket then crap back down after open

-ISRG: What scares most newbies is the spreads. Split it or hit the bid

-WIRE: Slow ass mofo

-EBAY: Medium speed. Not much risk of pops against you. stick out through prime setups

-PFE: Rarely ever holds above its upper bbs

-FFIV: A very thin and fast stock. Go lighter

-RMBS: Usually chops after gap up or gap down. And it sucks under $30! Chops everywhere!

:General Notes TOP=Most Recent/Important:

-For now play PATH OF LEAST RESISTANCE 1 & 3 Minute Trends with CHANNELS, 8 & 13 will be your bodyguard.

Mini (inv)Pups: target: NEXT Moving Avg, BBS, Pivot FILTER FILTER FILTER use the 5 limit red trade rules!

Ex: 13 & 8 are up trend. 3 min pulls back to channel tightening. 1 min takes a coil down and back up to form a 3 min mini pup and boom! If 13 & 8 are still uptrending then go long.

- Get around 25k sec limit rule by grabbing an account at http://www.alliancetrader.com/index2.html

-"Remember how sucky today feels... and let it stick with you the next time you let the opening 10 mins frick you up and you go on a rampage"--jay on big loss day

- ARCA always post/pre market NYSE

- Go ALL IN and ALL OUT on chop days. Paring scratch wont do jack for you

- Know your limitations!!! Ie: You cant handle goog

- TRO AVERY ADVICE ALL YOU NEED TO TRADE IS MY TRO_CONTROL AND TRO_DYNAMIC_SR2

- Set max daily loss and stick to it. Lets say $120

- you only 'hold/swing' when you are playing with the trend.. o duh

- NEW RULE. When posting 8/13 mini pups mention space to BBS's!

- As fish noted today (thurs) weekly hammer candle is MEANINGLESS til tomorrows close (friday)

- In most cases if a stock is trending dz usually causes a short term reversal and i HATE holding anything through deadzone

- stochs up, mas down = mob = stfo (stay the frick out)

- sept is known as the worst month of the year to trade

- dont chase 1 minute low bands on flat noodles (OIH .70c stop today!) wtf kinda filtering is that., dont enter on lower bbs

- slope and distance (distance to bbs targets, slope of the BBS needs to have a good angle that is NOT sloping asinst your trade. BBS Should be sloping down on a short.

If BBS's are flat, also forget trade

- Use backfills to exit on stops!

- Make sure you got atleast 30 cents to the BBS before taking trade

- Buy on rejection bounce off 5, not on the top of the mini pup

- Often times the 60m 5pd MA overlaps 13m 15pd. Look for pivots there or other things. HARD RESIS/SUPPORT

- make sure you know what a mini pup is: the 5pd tests and coils. if the 3/8 are choppy but the 13m holds, then that forms a mini# pup

Wait for candle to close in your time frame to see if pup is forming.

- When the noodles gap up so far they will normally retract. 6/2/04. Today shorts on qqqq's, aapl, sndk. All large $

- Respect the weekly levels! What bounceys they have.. wow saw this today 6//2/04

- Dont be an lovstoc :) Up or down $$ here and there $$. Stop focusing on money so much

- you dont get prime setups on flat noodles. With flat noodles u dont get much followthru

- Supposedly a TICK reading over 1000 on a choppy day is a short term mkt exhaustion

-best to leave the takeover stuff alone. if its a cash deal they dont move. if its a stock swap they move with the acquiring company.

-90% of this game is mental

-only increase share sizes during peak periods

-Don't second guess yourself on solid 3 lanes and yourself

-Check DIA's too when checking QQQQs for weekly/monthly support & resistance

-Stocks ARE GOING TO WIGGLE.. READ A BOOK. LOOK AWAY. DO SOMETHING BUT GET SCARED OUT!

-Fly on the wall FOTW general market news symbols: M

volitality index: VXN

-QQQQ's come into play when the daily, weekly and monthly MA's get near. 200MAs but the noodles are most important for us. Remember noodles change every 3 months and we dont have this data. So you must use the QQQQs

-Gaps: on listed stocks usually the NYSE specialist comes in quick and cuts the

legs out of excess gappers. Short!

-Dont forget about window dressing buyers/dumpers

-range trading works best in tight 5/15 markets. this is bad for scalps (like 6/1/06 today)

-Paring incorrectly. Give more wiggle room. below entry price!

-Gap ups rarely hold without testing the 60m 15.

-MAN you did that dumb dang. After the frist stop didnt take any other good signals for gains! fear

DO NOT DWELL ON STOPS OR YOUR DAY-darn EASIER SAID THEY DONE.. BUT OK!

-Watch the noodles @FIRST@ then the stocks second unless its news

-Often times the 13m 15pd over laps with the 60m 5pd MA. Look for pivots there or other things. HARD RESIS/SUPPORT

-Keep looking for pups. not just minis!

-Look to winder time frames to foreshadow MOBs or pups

-Check options prices of stock when playing on 3rd friday. YOu can get chopped

-dont trade a counter trend play on a slow grind up. you want to do counter trend on climatic pops!

-When the noodles are flat, stay away from baskets but keep an eye on them for multiple pups and alignment.

-Noodles 80 band slip on 13m chart usually means test to the 15pd atleast

-if jay plays something with flat 8/13s then look to stick only to scalps on 3/1s

-the 8/13's make up the critical 2 lanes of a 3 lane hwy (the 3rd being the 3)

-Luke @ UT made 237k in a year with a 2.07/1 win/loss ratio on the NQs. By keeping stops and correctly managing without emotions!

You cant have all green trades but the red ones should be small. Stubborn not to stop out on NQ today. Previous 4 trades were green.

This is an important note! He lost 1 out of 2 trades but made nice profit! Allocation, stops, non-stubborn ness! Heavier shares on good setups only.

-Always REACT at pivots, ma, supports, event levels.

-80/20 bands need to cross. Not test!! Dont get faked out

-Daily mini inv pup means nothing without the shorter time frames in the same direction starting with

the 60 then gauge the 8/13

-Jay: U saw the 1 min HI band mini pup ?. sell INTO the pops on 1 min hi band mini pups! Today COGN exit at .77 instead of .92

-LOSE A DIME - MAKE A DOLLAR! Stop mentality

-When the range on a stock is tight switch to shorter time frame chart. Ie today on NBIX. 3 got tight/flat, switched to 1m for scalps

or take range shares and chill for awhile .. til the next episode

-Jay's screen cap program: www.netu2.com

-Hidden order type: Enter order in by clicking the ask/bid comulmn. Then if its not executed you can change it by just clicking on the ladder!

-Watch for those pre/post market levels. 2.50's, wholes, .10 .90 .40 .60 .50 etc

-If you enter on high bands. Go LIGHTER shares in anticipation of pullbacks. You can always pare in if there is a premesis.

-Make sure to take some money off the table on that 1 min peak out.. pare mang!

-Premarket: Gauge for 20 band mini daily mini pups/inverse in morning and noodles

-ACD System for Jay is first 30 minutes (also called opening range method ORM via ral)

-3 Lanes are not worth counter trend plays!

-Use the QQQQ's as a noodles substitute when you dont have futures or they are closed from 4:15-45

-ECON REPORTS TO WATCH Maybe look to play econ report knee jerk exhaustion reversal NOT the initial panic. Imporant ones: Employment. FOMC ppi, cpi, gdp, ism, mich sentiment, jobs report are pretty much the ones to watch. Also the non-farm payroll report (via ral..wtf)

Michigan Setmiment. HELL NO! Too much wiggle at this stage in career.

-Give ample wiggle room for pared shares. Usually below your entry point. Must or else your wasting a stop!

-stop chasing like a sheep. MD mentions a stock. You enter, it tanks. Find sweet spots. Getting better at this

-Know what are the weekly and monthly supports without having to look!!

-E3 is a gaming/dealing place where EA and other game companies seal deals. Applys to erts atvi etc.

-Dont forget about 2.50s many bounces off there today (erts, wfmi)

-Use the CROSS UP on the 3 min chart to trigger entry on 3 lane/perfect storm

-Scalpers perfect storm: 3 MIN MINI PUP, 3MIN PUP, 1 MINI PUP/MINI PUP

-8/13m overshooting the 5/15s like they were nothing makes me hesitant to trade that stock (aapl today). snap: aaplbaddness.png

Also look for them holding. like a line in the sand. Use your brain

-When a stock buyfades then sellfades (or vice versa) thats called a RINSE. Leave it alone

There are 3 setups that you can play in the stock market:

trend continuation, breakout from consolidation, trend reversal

---printed:

-L2 / Time and Sales Notes (TOS)

(white=neutral, blue=up vol, red=down)

Bid - Red (down)

Ask - Lt Blue (up)

Exchanged Filtered B/A - Grey

Above Ask - Lt Blue

At Ask - Lt Blue

Trade Inside - Grey (spread trade)

At Bid - Red (down)

Below Bid - Dark Red

FromT - After hours neutral trade I think

FromT Up - After hours I think

FromT Down - After hours I think

[12:28] <Jay> the TIME OF SALES is what you watch for BLOCKS

[12:28] <Jay> lets get this part down:

[12:29] <Jay> BLOCKS on or BELOW the BID = SHORT COVERING = DEPLETION OF SELLING PRESSURE = BULLISH

[12:30] <Jay> BLOCKS at or ABOVE THE ASK price = BUY order being printed (shares were already bought, now wrapped avgergaged and printd) = DEPLETION OF BUYING PRESSURE = BEARISH

[12:31] <Jay> if BLOCK gets printed on the bid, watch if AX upticks the ASK

[12:31] <Jay> If BLOCK gets printed on the ask, watch for AX to downtick the bid

Ex: If I know LEHM is SELLER NTAP

when lehm prints a BLOCK on the BID and UPTICKS

that my clue to step in

because I KNOW THE PUP IS BREAKING

-only on the open can you press a 1m high band mini pup cuz volume is explosive

-get another account for disasters and hedging someday

-If you played jays alerts instead of jumpin around like a mad man. You'd be green!

-work on your pathetic fills!if your gonna chase. wait for a retractment to enter!

entering on, If you always enter to the wrong side think about an inverse entry.

-dont jump around to 10 stocks. DB--Play gapper/dumps and 2 baskets

-<Jay> i dont want to see newbies trying to make nickel clips on exhaustions all the time

-if your not willing to let it play out.. then there is no reason to play it.. nofear!

-if you get dual mini pups on a THICK stock you can go heavier. not much wiggle danger. i said this to bear today then i stayed out of SGTL

-Once again, wait out the 3 min 5s for tightening and pups. If too choppy then wait out the 8/13 min 5 period mas for dual pups/inv pups with 3 min consoldiation breaks.

-DB: your getting in late on everything! (i know this, pulling up stocks too late)

Dont pay top dollar on alerts. If not in then stay out! Espically on stocks you dont know. AMTD today

go back to the basics, 8/13 min dual pups on your side.. your taking crap

-if the 60m or 13m is flat on AAPL dont look at it

-8/13 gappers dumpers setup about 30-45 min after open!

-if the stock rejects off the 5pd and bounces, thats how you get mini pups! weahter it be the 3 8 or 1 min.

-Use hidden and non refresh orders on post/premarket stocks with large spread (called ice breg in ib)

-when you pull up a stock ask 'what are the setups that can happen from this'

-split spread=dont jump in a buy over the ask. get in somewhere between the bid/ask. for stocks with wide spreads

-FISHES RULES FOR SUCCESS AT TRADING

#1 know the methods (pups minis etc)

#2 know the support & resistance levels like the back of your hand 2.50s/pivots/5s/coil

#3 dicipline. to be able to look at the chart and say this is crap & bad Risk/Reward!

-Forget NYSE/listed stocks premarket (spreads too wide)

-You dont want to short against rising 3/8 min stochastics. ERTS today at 15:40. WTF were you thinking!! journalr0017.gif

-DONT ever pare-in against the 8/13 trends! (bear yelled at today). You add/pare WITH wider times!

-F'ed up on allocation and pacing today. Played heavy on crazy ass stock tzoo :(

-When playing oscillations, the early initial tests are the freshest/best to play because one side may eventually break and squeeze u

-Go real light on low band shorts then pare in more if the high band slips

-Fish: Keep an eye on where the sales are coiling and leaning from in BT

-nasty = good. use flat in terms of noodles if u dont like um

-<Maddog> That 3 better commit upwards before considering a bounce here

even with a couple of green 1-minute candles

-1min chart: fish doesnt use it that much. its misleading

Use 3min when 1 is choppy. stops are the same!

1min is for nailing and entry/exit. Nothing more.

-anytime u get a stochs crossing up on a 3/8/13 downtrend. u always risk a buyfade or tightening. play WITH the stochs & mas

-always look at the wide time frames first

-buyfade the noodles move up=more power. This has been noted before but is important so its noted again. Watched it on AAPL today.

-BBS's expand. Espically in DZ

-Think about briefing.com $25/mo reports/guidance..its got it all

-Fish: The more steady the lean and father the stock gets off from its 5ma (in down trend), the more playable the reverse longside scalps become on coils (ie: larger channel=more upside). Fish is the man

-For 1 min coils expect to hit the 8m 5 or 13m 5

. Noodles: Gauge them from 8:35+am on. Reason: Knee jerk from premarket economic reports at 8:30am. Helps you foreshadow trends and be ready to react. Ex of correct notes would be: 13-min noodles falling stochastics through the 80 band with uptrend supports 900x895 for 5- and 15-period moving averages. 60-min noodles stochastics 60 band rising with uptrend, support 893 x 885 for 5- and 15-period MA's. 3-min 200pd moving avg support at 893. NOTE WHERE OVERLAPPING dang IS on 60/DAILY!! Find yesterdays HOD and LOD on noodles.

-When daily gives you an inv pup. get all over it

-What does a mini pup mean if the 5period is broken? Means a tightening to the 15 peroid MA is setting up! NQs today! Sweet!

-When the futures re-open, expect a flush or a pop in the direction set prior to the futures close

-Only go against 8/13 for exhaustions / reversals(stars, dojis, pivots)

-And its true. No 8/13 Channel on NQ's does suck!!! Expierenced this today.

-Stop playing THIN stocks, you dont have the patience. If must, range then leave/ignore. (hmm tzoo)

-Stinks are at .50 levels.. coil at every .00.. ah dang..

-They like to TEST both ma's before followthrough on pup formations

-Lighter shares on open.. First 15 min! Its choppy.

-Taking PUTS (instead of shorting) allows you to still trade the underlying stock as opposed to taking a swing short and not being able to trade it. Becuase you cant be long and short in the same security. AAPl today.

-Always clip/pare 15min MA's.. 3 lanes start as fractured setups!

-Mini pup through 20 band on 8 min chart. Good signal! Use 5 then 15 as stop!

-Today you called inv mini pups when the 5ma was above the 15. That is a MOB!

-When a basket has a good range day or huge move. Expect the next day to suck/consolidate!

-Use 1 MIN/3min stochastics and NOODLES charts for earily scalp GAPPER/DUMPER plays. No longer time frames!

-In tight ma markets with the noodles. They can spike and lean out of the blue. Thats NOT the game we are looking to play. Chasing each spike and wiggle is dumb. Thats a 50/50 gamble. We want FORESHADOWING action to tip scales in our favor. Getting a .20 scalp on a random spike as opposed to getting a .20 scalp on a 8min mini pup 3 min make or break 1 min coil is like night and day. Reality is one trade was 50/50 odds and the other was 80/20 odds.

-Bottom reversal after strong or overlapping support signal very powerful! Concentrate on basket!

-Remember to pare down when you switch from 1/3 min premesis to a longer 8/13/60 premise. Atleast 1/3rd size

-Still not checking NQs with your trades. Your 3 losing trades today were going against the 8/13's and the NQ's

-Ask questions in slow periods OR q's that can be answered in a short fashion with Y or N

-Always consider the flipside. It will help you assess risk/resistance! Flipside being worse case senario.

*MadDog* Is higly filtered, max daily loss $200. 5 Days in a row at $200 loss would stop and re-evaluate. I dont take many trades. They are mostly winners. You wont find me trying to play a minipup on sideways noodles in the middle of the day. Terrible risk/reward. Dodge concentrates on a few stocks only like KLAC,AAPL, BRCM tries to make .25 on each one and goes home with $500-$1000 a day. He does it pretty cosistently and is very diciplined.

-Dragon charts dont work pre/post market. Mostly look at the numbers, ticker & market depth. Not enough volume. Too choppy.

-When entering try to do it on ends of a coil up for short or down for long so you have some room to get out on coil later on.

-1 & 3 minute allignment are like a trap door. Asked jay how he catches moves so quick. darn sndk today

When u get dual 1/3 min inv pups thats when you get the immediate hard moves (trap door as jay calls it)

-no 200 moving avg on NQ daily because of rollover (not 200 candles yet)

-Point out pups/minis when they actually form. Not 15 minutes late when the move is exhausted. Dissect moves and learn from the missed moves.

-Consolidations can look like star step sideways movement on stochastics and then slip down bigtime.

-If in stinky/stinky ranges wait for break below or above by .05c atleast. ie today shorted 58.90 on BWA had waited to 58.84 you'd of seen it reverse off the pivot.

-Tightening on long: 60m 15 hits, peaks then pulls back to 5. Usually to the 60. Like q-com today

-Start being able to THINK it through. Dont just stop. Dont just say 'mini pup on 3' and not go on and look at somethig else!! Consider the supports/resistances, and what the up/downside could be.

-Check your shares left/position before entering an order. Always seem to leave dang in my portfolio when I think im OUT.

-3 pts or less between 5/15's on noodles=FLAT! STAY THE OUT. AND Dragon STFU!

-From the long ass mp3 lecture: open price relatative to your postion. if your short you should be under open price. if your long you should be above. (swing/range)

------voiced below

-A pup failure can result in a stochastics cross down at a high band. Stochastics cross down high band.. failed pup is good short! 3/13/06

- DB on the open, we use time frames and watch the tick by tick usually after 10 you have to step BACK and forward step BACK and watch the general playing field also remember that the momentum in the first 15 mins is so great that i usually like to take extreme/not totally confirmed mini pups

-Whats the game plan on mini inv pups?? You trail the 5 peroid MA for the lower bb target!! DOES THIS MAKE SENSE?

-futures contract/rollover/expiration fridays are always choppy! (3rd friday) BELIEVE THIS!! Got chopped on this day.

-In the first 15 min its ok to call a mini pup or inv mini pup on 1/3 min time frame if the MA's arent going the same way because its very volitale. You dont have a lot of back data and your trying to find clairty in this violent period. Nomrally you want the MA's trending with the stochastics the same way. This kinda confused me today 3/16/06

Ex: AAPL today at 9:48:24.. It overshot to 66.15. Stoch was uptrending but main MA's were down.

-*cobra* I only use 13, 60min, daily, weekly & monthly for swings. He made $3400 today on google put and $1100 or so on ES. Less noise that way. Strive to play forex/futures one day.

-Keep in mind were the DAILY resistances are and room for profit potential/targets/supports

-EXECUTION: Look at history of BBS to see if stock has been tagging/overshooting.

Ex: Today trade on SNDK didnt have any closes over its upper bbs. I saw it peaked but missed 10c profit because I sold down under the BBS.

As targets hits, have the price qued up a cents shy of the upper bbs with a sweep order. If it pops you'll still get filled higher.

Drug company earnings-things to watch for:

1. Which drugs are important

2. EPS

3. Guidance

4. Is the pain done? Is there more to come?

5. Big float or small float? how did it behave in the past?

-Targets: Please remember that when you get a 1 min hi band thrust or mini pup above 80 band you need to be SELLING longs (or paring) not waiting until it crosses back down

and you give up 1/2 your gains and then panic out u can anticipate the targets

-Reversing shorts: Cover with double the shares. Longs, sell with double the shares. Its tricky!

coil = a V shape reversal bounce which may or may not have followthrough, often referred to the stochastics (ie: MSFT 20 band coil 1 minute stochastics, means MSFT is taking a V shaped bounce through the 20 band). Trigger can be a coil that crosses the stochastics back up. I cant belive this wont in terms.

- bollinger bands are not support levels. they are exhaustion levels. Only use them this way when a stock gaps up high or gaps below them on open/reopen. Also works on post halted trades etc..

-If the ma's are flat dont just call out mini inv pups. Even if the 5 is above the 15 (or vice versa)

Any time you call a mini pup the MA's are moving up/down for inv otherwise MOB or attempted minipup. There is a trend channel.

base = Basing is like a consolidation. It basically indicates a STABILIZING. Thus you want the MA's to be stabalizing sideways and getting ready to break one way or another. The base is not set until you have a candle open above the previous sideways candles. (if your looking for up trend) below if your looking for a break down.

Of course on gapper/dumper they will be extreme. Base trend: Longer base trend=stronger uptrend. Updated 03/14/06

-When you see an 8/13 mini pup, PLEASE make sure the noodles are moving up for entry confirmation.. and watch the upper bollanger bands. if they are already at the upper bands then there is very little upside.

-Jays only care candles: stars, hammers, and dojis AND DOJIS MUST COME AFTER A SERIES OF ATLEAST 3 CANDLES!

-Jeck: GOOG +4.00 today. Short on 5MA down trend. Used falling 15pd ma as stop. It got hit and he was out +4.. Its nice because the 15 is a good trail. As the 5 goes down so does the 15 in porportion.

-Dont forget to look for coils & crosses up/down (stoch & main chart mas)

pop

-When a stock is sell fading and the noodles take a dive. Look to jump in for even harder leans. What do you expect sellfading stocks to do? Fall even faster! Lesson o' 03/10/06. Look to 8/13 charts to identify sell fades.

- Only look for fades in moderate to heavy vol.

- Trend sets the pace for the stochastics

- On fractured setups, make sure atleast 2 time frames are in your direction

- Cover ahead of over lapping support on shorts (vice versa for longs)

- 10:33 Jay Bear--dont post anymore on brcm UNLESS the 8/13 min ma's are uptrending with both stochastics up trending or 8/13 min ma's are downtrending with both stochastics down trending

nothing else matters until that basic filter is hit.

- <fishtrader> I wont touch aapl long below that 60m 5ma

------------------Proceed with printed:

:Recent new audio/misc chatroom notes added 3/08/06

-GAPPER STUFF: On gap downs in which you expect retracement for long entry: Wait for a base on 3 min, then target lower bbs, then its the 3 min 5 target on a move up AFTER the 1 min low bands stoch coil trigger. Pare out at each resistance, ex: 3 min 5, 8 min 5, 13 min etc. Be sure and lock 3 min 15ma overshoots. On MRGE today we got a sweet 3 min hammer, and then the 1min popped when the 3min crossed 20 band! Good green. After the 3 min tightens to the 15MA (if it completely gets there) you should be paired out 80% or locked out. The 8/13 rarely tighten to the 15. IF 3 MIN 5 RESISTANCE BREAKS IN THE OTHER DIRECTION OF YOUR TRADE--GET OUT!

More on base: Once u get the candle to update and its under your stocks current price--thats the base. (your stock is a candle above that low point). If the higher candle isnt near the lower bbs then that BBS is your paring target first.. Then the 3 min 5 etc etc etc... Then u look to use the mo of the stochastics. Ex today 2/24/06: MRGE

[10:02] <Jay> dragon, do u understand the dumper tightening now?

[10:02] <Jay> 3 min lower bbs base

[10:02] <Jay> 3 min hammer (star for reverse play) / higher candle/break base etc..

[10:02] <Jay> 1 min coil

[10:02] <Jay> then 3 min 5ma target!

[10:02] <Jay> usually u get a 1 min low bands coil

[10:02] <Jay> mrge was very nice becusea once it crossed the 20 band on the 1 min

[10:02] <Jay> it mini PUPPED

[10:02] <Jay> the rule thereafter is simply to trail the 3 min 5

[10:02] <Jay> and pare out at each resistance

[10:02] <Jay> 8 min 5

[10:02] <Jay> 13 min 5

[10:03] <Jay> and lock 3min 15 overshoots!!

[10:03] <Jay> then wait for make or breaks

[10:03] <Jay> write that down

[10:03] <Jay> they dont all turn out that perfectly

[10:03] <Jay> the 3 min 5 is so key tho

[10:03] <Jay> because if they break that 3 min 5

[10:04] <Jay> then a 3 min inverse pup can trigger

-RESPECT 2.50 / Stinky .5 Levels!

-If the 3min 5 is a pain in the arse and stops us out 3 times then wait for main course (8/13 direction). takes bout an hour

-set daily stop losses aside on gapper/dumper appertizers or stay out of first 15min

-if you cant short the stock, dont play it!

-usually 10% or more on gaps make for good plays

-biotechs can wiggle .10-.25 from the 3m 5. if this scares you wait for 8/13

-stops on longs UNDER the 3m 5, stops on shorts, right above the 3m5

[end gappers]

--When the channel tightening is complete, it becomes a make or break (bearish trader..good questions)

-No pre-market charts cept on NQs. Only 9:30-16:00 ex. Just watch the levels and note the range. Also watch how it closed. Its intutitive. Usually there are continuations of the 60 min pattern the next day.

-Bear, you have to realize on mini pups you give wiggles room to the 5 period MA in the time frame with the mini pup.

-Have buy/sell orders set in BT for overshoots/pivots/stickys etc (stop or limit orders)

-Once earnings season is over for the most part you get a lull and some tightness on the dailies and the valley period creeps in.

-Channel tightenings. Start with channel to left of 1 min (which is the 3 min). If it tightens, go to the 8, then 13 etc....

-Today on rimm notes:

If the 1 min is at a low band for extended period of time, its going to ramp up at some point. You must anticipate and cover into the sellers.

when the 8/13 lower bbs's hit. that means they will tighten and will need more time to play out.

-Dont take breaks at the top of the hour!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

-Trend lines work. Theres no doubt about it. jeck wtg!

-Active trend has a gap in middle of trend (trend channel), its got higher highs, higher lows.

-Trend=when the 5pd crosses over the 15pd and the bbs's expand on the 8 and 13 min chart then you can say its trending up. Make sure there is room to the upper bbs for a move. (or lower if your shorting)

-A mini inv pup targets the lower bbs and vice versa for mini pups.

-Lock scalps at upper/lower BBS's

-Dont let 1min slips, slip through your fingers. Do some 1 min scalps again with cash.

-ATTEMPT = In jays terms still means flat movement but possibile breakout. Ie: coil or mini pup ATTEMPT on noodles

-You pare in at a higher level only with the 8m/13m trend. Ex RIMM today. Short at 73.50, 1 and 3 popped to $74 resistance. Pared in more shares at 73.90 and then rimm leaned to $73.30. When the 13m/longer trend is down trending its ok to pare in light. Never ADD PARE against the longer tend.. this is key!

-If you have no visable target then your premesis failing is your target. But u can always use stinky/sticky$5s/250s

-The actual coiling of the 1 min or shorter time frame forms the mini pup or inv pup!

Saw this today again on RMBS. Everything had a mini pup cept 3min was MOB. 1 min took a coil then 3 min formed mini pup.

-The purpose of a 3 min inv pup and 3min mini inv pup is to hit the lower bbs. They coil on the 1 min stochs oslication. Then it hits a resistance and slips back down. 1 min took a low band mini inv pup slip, thats where you clip/pare some $$$ 8/13 min lower bbs still lower. Thats why I said trail the 13min 5. Theres nothing to worry about when there is 3 friggin lanes. Wait for another lane to break before panaicing. RIMM 2/21/06

-best oscillations come at the tail end of a panic. Usually at the beginning of a channel widening or at a channel tightening. Once the channels tighten, no scalps to play.

-Once u wait out panic and initial reactions you want to step in on the trend.

-80% of gaps exhaustion and channel tightening occur near overlapping resistances or supports

-Watch for MA's crossing on down/up trends. Be ready for a reversal near mood shift period 10:30am, 1:15-1:30. Yeah! Short on cross down!

- Do this! Whenever u have the urge to say a mini pup is forming. If its truely a mini pup the ma's will be trending with a channel .. if 5/15s are flat then its an attempted mini pup because they have not crossed and formed a channel yet. And also the 5 must be below the 15 on INV pups/minis and above the 15 on regular mini/pups.

-Once the peak of a trend hits, retracments to 5 period ma are first expected at which point a coil can form. If the coil fails, then a move to 15 period ma expected at which point another coil off. This sets up a ma pup break or a smothering and 3.5 strike trend reversal. PLAY: BREAK & EXHAUSTION http://www.undergroundtrader.com/training/jays_methods2/sld016.html

-Morning trades until 10:15. If 1 of the premsies fail-GET OUT quick.

- AFTER the make or break, a moving average downtrend doesnt mean squat on the way down if the stochastics are crossed back up

does this make sense? the stochastics are the engine if the engine is in reverse it aint moving forward with the trend so get this thru your head. The ma averages just havent caught up with the stochastics yet. Its like spinning tires or delayed reaction.

an uptrend needs stochastics crossed UP

downtrend needs stochastics crossed DOWN

otherwise it forms a channel tightening or is setting up a make or break

-Keep HOD/LOD in mind for resis/support when riding ramp ups

- Trend = when the 5pd crosses over the 15pd and the bbs's expand on the 8 and 13 min chart then you can say its trending up. Make sure there is room to the upper bbs for a move. (or lower if your shorting) Active trend has a gap in middle of trend (trend channel), its got higher highs, higher lows.

- 4 PARTS: CONSOLIDATION - WIDENING/BREAK (MOB/PUP) - PEAK - TIGHTENING/EXHAUSTION

The make or break IS the f'n widening. How else is it going to widen if it doesnt break or fall?!!#!#&@ qbert..ha

-make or break = situation thats normally composed of a moving average pup and an inverse (or mini) MA pup on the same chart. One will trigger follow through. You can reverse that too (ie: ma inv pup, stoch mini pup) Always look to longer time frames to try and foreshadow which will break. Usually either 13min will form a mini pup and cross the 13 min 5ma back up through the 15 or the 13 min stochs will cross down as the 13 min MAs for inv pups. If your unsure look up some make or breaks. http://www.undergroundtrader.com/training/jays_methods2/sld027.html

Main MA's going in 2 different directions is also a MOB(inverse ok as well). MOB can form when 5 & 15 are in divergant directions on main chart. A make or break turns into an uptrend on a mini pup or inverst mini pup when the stochastics both cross down with INV mini.

-ALWAYS factor in 2.50/$5/.50 cent coil support/resistance ranges before the trade!

-If you have 3 losing days in a row, then STOP TRADING & WATCH!

-IPO's: Under $20=Junk, Good Underwriters=MSCO,GSCO,FBCO,RSSF. Bad=LEHM,SBSH,PIPR,HMQT,BEST

Thinner float=More violent moving

$5 and $10 are support/resis levels on IPO's (they are anyway..g)

-No more ax market makers on level2 except possibly during ipos where you want to watch the lead underwriter

-Noodles reversal times 10:45-11am, 1:45-2:00pm when market is trending

-to measure upside use the 2.50 and the prior resistances, trail 5ma

to measure support use the 15/5 periods, 200pd ma's

-QUIK ENTRY/EXITS: <canetguy> BabyHuey, so your are saying that your place your order to buy at 24, it fills. The price goes up 1/4 point then charts turn against you. Then you SELL with a limit price of 24, and let the ECN's fill you at the higher price? (it may be 24.15, 24,20). <BabyHuey> yes. This is fading the bid (or ask on a sell. Works as long as your not too far outside of NBBO (g note)

-Wiggle = Tick against your position (when all the other charts are still going with your trend entry)

-SCALPS: Whats my stop?? -- Whats your stop?? Fool! When entry premesis change, sideways or reverse!! Get out!

-Get out/stop out based on your entry premisis! Are you playing fora 1 min stoch bounce? If it stalls or sinks, GET OUT!

Did you enter on 1min trigger but are using a 3/8min chart to range. If so wait til they fail, not the 1 min failure!

-the longer the time frame the stronger the support/resistance!

-5pd ma line acts as resistance, and 15 support on uptrend..depending on where the stock price is

-5 period ma is the lead, 15 period is your trailing stop on shorts

-Best prime setups for newbie setups to trade:

. 3 minute make or break with 13min mini-pup w/ the 60up

. Perfect storms

. Consolidation breakout + buyside fade, noodles 3 min mini pup triggered by the 1 min noodles pup boom !

. 3 min inverse pup breakdown + 3 min noodles peak + 1 min noodles slip + 1 min stoch slip

-HEDGING RELOADED: Finally!

. 2 Accounts Needed (cant be long&short in same account)

. Ex: Shrt AMAT 57.50 accnt#1

Long AMAT 57.52 accnt#2

Scenario 1: AMAT Tanks. The profit the short makes erases (hedges) the loss of the long

Scenario 2: AMAT Rises. Profit from long covers short loss.

Both these scenarios dont make you $ but buy you time so you can see the REAL TREND.

They are great to use in make or break or any time when you know a move is coming but not sure which way!

You can cover your short on a break out and reshort at a higher level to reattach the hedge or just close da hedge

. This is a method where you can take 5-10,000 shares of SUNW in comfort.

. THIS IS AN AWESOME METHOD. Basically is 0 risk (except comissions) to initiate!

. Only CONSIDERATION is make sure you have enough capital as to avoid a margin call on the loss account!

. Hedge trading has allow me to remove any fear from taking stops

-breaks are technically 2 candle closes

-Panics happen at overshoot ROUND numbers.. (rounders :)

-Also check daily charts for pups/mini ups or when we are trading near 50/200 period MAs/BBS

May want to see where the 5MA is for support/resis and 15 for stops

-Noodles: (NQ5) At every full 5 point level there are 2 point over/undershoots like stinkys/$2

-For up ACTIVE uptrend 5MA must be above 15MA and vice versa on down trend. jay scolded today.

-PUP CLARITY:

Remember: a mini pup is not a mini pup unless the ma's are uptrending (down for inv). The mas must be moving in the same direction for mini pups. If they are divergent or crossed that is a make or break.

-3rd friday of every month. Flat and light (opt exp).. May want to take it off or play morning/afternoon only.

-Wait for the f'n stochastics to cross before starting the shorts! ie: xmsr 2/16/05. Check trends

-Dont take the buy or sell imbalance to heart. Means nothing

-Options Seminiar. STOCK PRICE-STRIKE PRICE = TRUE OPTION VALUE. Everything else left in option price is time/volitility value. Ex: CSCO trades @ 13.46, Strike Price is 12.50. True option value is .96c Option price 1.30, .34c is premium

Dont Hold options more then 5 days or time will errode.

More techniques (straddles & spreads at link)

http://www.undergroundtrader.com/archives/index.cgi?channel=Seminars&month=03&day=27&year=2003

----

base = Basing is like a consolidation. It basically indicates a STABILIZING. Thus you want the MA's to be stabalizing sideways and getting ready to break one way or another.

Of course on gapper/dumper they will be extreme.

gapper = stock that gaps UP several points or more on NEWS. Usually $1.90 or more. Really depends on the volitality of the stock and normal swings.

dumper = stock that gaps DOWN several points or more on NEWS Usually $1.90 or more. Really depends on the volitality of the stock and normal swings.

. <Jay> A wide channel is a plethora of MEAT! you can play the break/the widening/the exhuastion/the tightening

. MSH=Market Structure High is High, Higher High, Lower Higher - short contract on next candle under last lower high, FOPS actual trigger(wicks count)

. MSL=Market Structure Low is Low, Lower Low, Higher Low - buy contract on higher candled under higher low, TOPS actual trigger(wicks count)

. laggards are great! its like buying at wholesale. usually the sellfaders turn in to laggers. like SNDK today.

. When the vix rises, the market falls. (like trin)..o dang inverse

. Give you a map for the next day –calculate the dailys every night for next day’s trading

. The 5 period is the lead and the 15 period is the laggard

. So if i was long, i would look to sell the 15 period stop exit

. Compare the relative volume from the first 45mins of the day to see what kind of volume you are in

. On a breakout, the stock will pop with volume, but wait----it will be no different than the 5 other headfakes the difference can only be seen when the channels start to widen and this is the KEY distinction between a headfake and a real breakout

. 3 Types of enteries: EARILY, SWEET SPOT, LATE

. Remember, the only BREAK worth playing is when they break it 4 u and then give you a chance to step in on the pullback. have stochastics on your side (not channel 10)

. 8/13 allign, then 3/1min move, you trigger your entry! This allows you to PARE the 1/3 minute moves and ride lighter on the 8/13 minute trend

. Mini pup info: Trail stop the 3/8/13min 5pd ma!!!! Why? Because mini pups guard that 5 period. if the 3min hits i pare 70% of the shares. ride the 30% with the 8 min trail stop at 5 period ma for upper bbs

. Channel tightening ALWAYS means: the MOVE from the 5 period moving average to the 15 period moving average

. Already at upper targets? (chat quiz) BBS? Do nothing. wait for a retest of 5, then step in on 1 min trigger before entering.. capiche?

. When u play those mini pups and pups, make sure that you give yourself candle closes

. What makes bollinger bands expand: pullbacks to support NOT the momentum breakouts

. Where do you enter on a PUP? Confirmation is a CLOSE above the 5 period ma candle close for that time frame and stochastics cross--however, you can take early entries on a 1 minute cross provided that you have a mini pup on the 8/13 minute

. Short targets: first target is gonna be the TIGHTENING back to tthe 3 min 5MA or next resistance

. Wider BBS=time to play. Tight bbs' foreshadow eventual breakout but right now consolidation. wait for MOB

. When a shorter time frame and wider time frame have duelling mini pups, expect the shorter time frame to have the immediate impact but the wider time frame will eventually follow through

Eg: 5 min mini inv pup vs 13 min mini pup

. Earily unconfirmed setup/light shares. The WIDER time frame=ligher the shares. Only go heavy on perfect & 3 lane

. In uptrend 5 period MA acts as the resistance and the 15 period acts as the support when a stock is in a DOWNTREND <--- alling 5 period and falling 15 period the 5 period always leads and 15 period follows, 5 period is the lead and 15 period is the resistance

. Market Flow Symbols

$ADV - NYSE Advancing Issues

$DECL- NYSE Decliing Issues

$EPREM = YM Program Selling Index

ND #F - $NDX (supposed to give you the nasdaq premium)

. A 3 min noodles inverse pup breakdown will usually overshadow the 1 min noodles uptrend or pop fake

thats why when you hear me point out a 3 minute noodles inverse pup breakdown setting up

you better understand the 1 min noodles bounce is most likely nothing more than a headfake

. on TREND up days dont short against the trend if the stock is trading within .35c of the 5 period

Luke on Futures

Luke: -3.5 roughly losers, +7 on winners when I trade the NQ's. 1:2 Risk Reward!!

KISS OF DEATH SETUP by Luke

- What i do is determine what the 5 day INTRADAY average (RZ) is for the NQs and ES (not ATR)

- The ES may have an average range of 20-21 and it may trade like that for a week or so then it may drop to 17-18

- I will add or subtract that value from the high or low. this gives me the other side

- If think we gonna have a range expansion day i will multiply my value by 1.382

- Example: On the NQ now the average is is 35ish so if we suspect the low is in....for now we can add 35 to it to get an upper zone =1061-1062 areaand do the opposite for the lower zone high =1041, low =1006

- RZ = Range Zone, UZ=Upper Zone, LZ=Lower Zone (Use XLS File!!)

- RZ Formula= High of 5 days ago - low of 5 days ago +

High of 4 days ago - low of 4 days ago +

High of 3 days ago - low of 3 days ago +

High of 2 days ago - low of 2 days ago +

High of 1 days ago - low of 1 days ago / 5

(Dont include gaps or overnight data)

- Once we “expect” a low is in for the morning, we can calculate our upper zone (even if the low may only be temporary)

- Upper Zone (UZ) = Expected Low + RZ value

- If prices break UZ or LZ this gives us additional “pivotal” areas to watch/trade

UZ2 = Expected low + (RZ*1.382)

LZ2 = Expected high – (RZ*1.382)

UZ3 = Expected low + (RZ*1.618)

LZ3 = Expected high – (RZ*1.618)

:Recent audio/misc chatroom notes added 12/25/05:

. 5PD should usually ride above the 15PD on longs and below on shorts. Watch for divergances! Rides.

. Stocks shoot throiugh upper bbs 15% of time, normally they retrace!

. Always pair 75% or more out. 50% makes no sense!

. Use the 8 and 13min charts and DO clippare at 15ma atleast

When 5pd crosses down below 15pd its a good short signal. Cross up = long. When they are far apart there will should moves.

. Accept a stop when the 3 min chart 5pd rejoins the 15 pd ma

. Always wait for timeframe candles to close!

. Never place a stop on: A WHOLE NUMBER, TRENDLINE, MOVING AVERAGE, HIGH OR LOW OF THE DAY/WEEK, 2.50, STICKY, STINKY OR ANY OTHER IMPORTANT SUPP/RESIST LEVEL. IT WILL GET HIT UNNECESSARILY.

. First hour most important, 9:45-10:45am. Longs over 80band stochastics play out more. Shorts below 20 do as well.

Due to a lot of gappers. Maybe we should just get good at first hour plays.

. Good trading is like a gun. You only have a limited number of bullets per day. Maintain awareness & assertiveness! Try for 70% accuracy then cash. 4 green days a week!

. futures: tax advantage, no uptick rule, good leverage (via luke UT)

. when stochastics are in extreme bands or glued to top or bottom, play wider time frame (13 60 8 min etc..)

. Jay dont hold options greater then 2 weeks

. STOPS: Setting manual stops: Type in a sell order to read about .10-.15 below the stop and once the stop is triggered u hit it fast and get the sweep to assure the fill. -- try on demo

. set stops 5cents below support. Buy 10c over days previous high

. only route NYSE / listed stocks through ARCA. Specialists dick fills on small guys

:Terms:

Acronomys = LOD=Low of the day, HOD=High of the day, MOB=Make or break, MO = momentuum ticks
Basket stock = Stock you familiarize yourself with. Know how it reacts to conditions. Its your gold for the first few weeks/months! Pick stocks that are upper tiers of nasdaq

FOMC = Federal Open Market committee meets every few months to make decisions on interest rates. Big knee jerks at about 2:15pm on news. We consider this a second market open. They usually meet at 2:15.. First 15-20 minutes after is like market open then trends kick in after that. It's a speed bump. Market is usually cautions before this!

P(UP) = PowerUPtik breakout, a flatline 5 period resistance and a rising 15 period MA support that breaks out when 5 period breaks higher. PUP! The 5 Period MA will go sideways and the 15 MA will go higher. Eventually the 5 will break, squeeze the shorts and burst higher. Look for candle to close above the 5 period MA. In most cases a PUP will be followed by a mini-inverse pup which then forms a make or break situation. This initial mini-pup/slip suckers shorters in that can get hammered out quickly. Always check the 13min noodles to see if its forming a minipup. It so, that is foreshadowing the 3 min moving average pup. If the noodles are forming a 3 min MA pup then that will lift most stocks & your basket stock should be showing the same setup.The essence of a pup breakout is a short squeeze. And also the 5 must be below the 15 on INV pups/minis and above the 15 on regular mini/pups.

Mini: The %d is 5 and %dslow is 15

Inv pup=Red white Red candles

Pup=White red White candles

*NEW PUP CLARITY*:

Remember: a (mini) pup is not a pup unless the ma's are uptrending (down for inv). The mas must be moving in the same direction for mini pups. If they are divergent or crossed that is a make or break. The %d and %dslow can be above or below as long as they are moving with the trend.

Also 5 needs to be over 15 in uptrend, 5 below 15 in down.. If not, wait for cross before calling any mini pups.

PUP Breakdown = now inverse the above and you get the 5 period trying to flatline under the 15 period

and the 15 period sellers are trying to push the 5 period buyers once again the PUP breakdown is when the buyers decide to wave the white flag as they get overwhlemed with the sellers 15 pd (on a downtrend) and thereby driving the buyers out and bringing more sellers off the fence

make or break = situation thats normally composed of a moving average pup and an inverse (mini) pup on the same chart. one will trigger follow through. You can reverse that too (ie: ma inv pup, stoch mini pup) Always look to longer time frames to try and foreshadow which will break. Usually either 13min will form a mini pup and cross the 13 min 5ma back up through the 15 or the 13 min stochs will cross down as the 13 min MAs for inv pups.

-Make or break aka MOB (revisited). ma pup and mini inv pup on stochastics same chart or main MA's going in 2 different directions (inverse ok as well). MOB can form when 5 & 15 are in divergant directions on main chart. A make or break turns into an uptrend on a mini pup or inverst mini pup when the stochastics both cross down.

http://www.undergroundtrader.com/training/jays_methods2/sld027.html

mini-pup = same as a PUP but with the stochastics. To compare with PUP-5 period would be %k and 15 period is %d (see PUP)

Trail stop the 8/13min 5pd ma.. Why? Because mini pups guard that 5 period. The %d and %dslow can be above or below as long as they are moving with the trend.

5 period would be %k and 15 period is %d (see PUP). If its a cross over we call that a slip or break out

range trade=8 & 13 min time frame

ETS=Entry Target Stop - Each trade should these 3 along w/ a basis for why you picked those points based on your chart

COIL SUPPORT/RESISTANCE=Usually .10 below every .50 increment is coil support and .10 above every .50 increment in a stock is the coil resistance (ie: MSFT trading at 51 means 50.90 is coil support and 51.10 is coil resistance), stocks tend to overshoot to those levels and spring back up or spring back down. (coil over shoots)

same as stinky 5'S. On noodles 2 full pts above and below every 5 pt!!

Noodles Coil = (NQ5) At every full 5 point level there are 2 point over/undershoots like stinkys

PARE = To scale out of a position, eg: if you own 1,000 shares of MSFT, means to sell a partial amount at higher increments like 700 shares out at 49.70 and 300 shares out at 49.90 Take profits on some of your position. Paring only applies to traders who trade atleast 1000 shares. You pare because a short time frame signals exhaustion while a wider time frame signals continuation. Paring is necessary on heavy shares! Remember to account for wiggle on paring. Dont attempt to pare until you have mastered the psychology of STOPS.

SELLFADE: noodles move UP and stock MOVES DOWN (opposite of BUYFADE)

Short squeeze: *n* Occurs when the price of a security rises sharply, causing many short sellers to buy the security to cover their positions and limit losses. That buying leads to even higher prices, widening the losses and squeezing of short sellers who haven't covered their positions. Breakouts start as short squeezes. 1 minute . This is why stocks have to pull back in order to move higher. Most tend to happen when noodles open under 20 band.

trend=consolidation/tight, brek/widening, peak, reversal/channel tightern/exhaustion

MSH=Market Structure High is High, Higher High, Lower Higher - short contract on next candle under last lower high(wicks count)

MSL=Market Structure Low is Low, Lower Low, Higher Low - buy contract on higher candled under higher low

three candle failure=3 candles closing lower

head-fake=A term used in technical analysis that refers to a situation in which a trader enters into a position in anticipation of a future transaction signal or price movement, but the signal or movement never develops and the asset moves in the opposite direction.

backfill=a retracement from an overshoot support or resistance level. ex: Over shoots 48, hits 48.10 then backfills to under 48. Std: .10c above/below support&resistance

tier 1 stock=stocks that move with noodles. highest ranking stocks in index fund

basket stock=your bread and butter/familiar stock

rippe effect= 60 > 13 > 8 > 3 > 1 > trends flowing down on charts

active trend=trend in which the 5pd MA is continue to move higher or lower w/ the 15pd ma following . Knowing that a stock can never reverse w/o first breaking the 5pd MA, many traders use that 5PD MA as a trailing profit stop. For up ACTIVE uptrend 5MA must be above 15MA and vice versa on down trend. jay scolded today.

:Methods:

(also see trader cheat sheet)

STOP LIMITS = Price field - enter the price you wish to obtain. Stop field, enter the price you wish the market to reach before your order is sent. The Stop price functions as a trigger for you. Ie: Stop: 88.40, Price: 88.30

4 Parts Of A Trend = 1 Consolidation/Tight Channels & Light Volume (Stay out!) (girl)

2 Make or Break/PUP/Channel Widening Volume

3 Peak/Max Volume Widest Channel

4 Reversal/Channel Tightening to 5 then 15pd

5 & 15 MA's = Meat between bones. Far apart=good moves. Tigh 2gethr=choppy quick turns

3.5 Strike reversal (after uptrend ex) Strike1-5 Period stops making progress and stalls/peak. Strike2-15 Period stops making progress/5 tightens towards 15. Strike2.5-is stock fades a noodles stochastics bounce Strike 3.5-Retracement coils back and forms a mini inv pup casuing a breakdown and reversing the trend. Reverse for downtrend reversal

http://www.undergroundtrader.com/training/jays_methods2/sld017.html

darnIT all this is be a noodles fade move we been jumping in on! Ie: Stock sell fades the noodles and finally burst out with the noodles take a pop or mini pup

Fractured Setup = Indicatiors diverge. Trading fractured setups=threading the noodles aka taking advanrage of working time frames before resistance hits on the divergent time frame. Most setups are sadly from fractured setups. Bad environment for newbies. Prime setup is opposite. All lanes going in one direction!

Three Lane Highway = *n* A setup where the 3/13/60 minute stock & noodles stochastics are moving in the same direction on the noodles and or your stock. Including the 5 & 15 moving averages!! The 3 min will usually turn to indicate entry 3lane highways are prime setups, watch the 60 minute, gauge the 13 min and time entry with the 3 minute. Use 5 days of data for 60 min chart. 5 Should ride above 15 on longs and below on shorts!!! The 13/60 will usually foreshadow and then the 3 minute will turn allowinfsg entry (3 lane)

Perfect Storm = same as above setup but there are (inv) mini pups on stock stochastic on the 3 time frames. Use 5 days of data for 60 min chart. (noodles also helps if they have them on stoch)

1/3 Min Charts = Used for triggers on entry/exits/scalps. Always use as trigger for longer time frame as well

Gap Openings = Good to short. Make sure 80band stochastics crosses down. The 5 and 15 pd moving averages need to catch up. When this happens--cover

8/13/60 Min Charts = Represents the FORREST and overall move of trends. They may seem laggard but act as a foreshadowing effect.

(in order of STRENGTH)

STICKY 5'S LEVELS: *n* stock prices when they reach increments of $5, subtract .60 and add .60 to the level for the sticky 5's range, eg: at $55.00 - 54.40 x 55.60 is the sticky 5's range, 24.40 x 25.60 is the sticky 5's range, 9.40 x 10.60 is the sticky 5's range) these levels should be considered additional support and resistance levels especially when they test the first time on wider channel panics. These are TOUGHER then the 2.50's (hard resis/supp)

250'S/2.50'S= Stock prices in increments of 2.5, these levels act as strong support and resistance 2.40, 2.50 and 2.60 levels (eg: 47.40, 47.50 and 47.60, also 22.40, 22.50 , 22.60) options are priced in 2.50 increments up to $50 and this acts as a magnet

stinky 5s = is the .10 overshoot/undershoot at .50 levels, 55.40, 55.50, 55.60, 55.60, etc stocks peak momentum at those levels, thus like a catcher be ready to exit into them. If your at a whole number ie: $55, $56. The .10c over/undershoots are just called coil overshoot levels.

Noodles Coil = (NQ5) At every full 5 point level there are 2 point over/undershoots like stinkys

Other Supports = 5MAs, 15MAs's on all chart. Every whole number

:Harmonics:

. Work smarter not harder. Take breaks. This is your job!

. Nightly: Spend 15 to 20 min going over your daily trades each night. Looking for pups/minis. Other things that caused you to succeed or miss the boat

Also look over basket stocks for pups/mini pups on large time frames..note any near supports

Explain the past moves. Only then can you expect to be good at future moves

. Good to mark the high and low of first 30 min manually!!!

. Re-Entering a position when its failing to one side is 'ok' just make sure there is room left in move

. Moving averages are the ROAD MAP & stochastics is the ENGINE

. Write down the MA & Support/Resistance levels of your stock before entering. Or use the 'mark' on chart feature. It should be noted in your journal anyway.

. Choppy markets favor the swinger

. VOLUME check before entering. If you do play light volume, LIMIT trades, share sizes, check bollinger bands position

. Ranging markets favor the swing trader & scalper. Respect the power of a trend. Range trading applies best in a tight 5 15 market where scalps are very small.

. Exit in to buyers on longs. Buy into sellers on shorts. Its called playing the panic.

. Scalps only first 15 min. Open is very volitle and crazy!

. Scalpers should use the 60/13 charts as foreshadowing & lower time frames for trades--Range/Swing use them for actual trades based on trend

. Swing/range traders their main weapon is 13/60 min chart for major plays/60 Min is a 'backdrop' for scalpers.

. Triggers: Short Time Frame Charts, Stochastics, High Volume, MA Crosses, Hammers, Shooting Stars

You dont want to fight the 8/13 min chart. Ie going long when its in a down trend. 13 Min Mini-Pup on Stoch on stock & noodles follows through 89% of the time $$

. Noodles: Remember THIS--If the 13 min noodles are n an uptrend & stochastics cross down through 80 band then we can expect a pullback to test 15pd MA on the noodles. Short time!

. Noodles: Gauge them from 8:35+am on. Reason: Knee jerk from premarket economic reports at 8:30am. Helps you foreshadow trends and be ready to react. Ex of notes would be: 13-min noodles falling stochastics through the 80 band with uptrend supports 900x895 for 5- and 15-period moving averages. 60-min noodles stochastics 60 band rising with uptrend, support 893 x 885 for 5- and 15-period MA's. 3-min 200pd moving avg support at 893.

. Consolidation is when 5 & 15 pd MA going sideways with light vol. Tight=close to each other

. Once a stock climaxes it will retrace to the 5PD & coil off or shoot to the 15pd MA

. Longer a stock stays above its 5pd MA the higher the support will raise. Espically 9:30-9:45am

. Look for supp/resis at horizontal price lines

. Achilles hell of a squeeze=cross back down below 80 band

. Midpoint body of a long range candle is a good place for a stop

. 5/15 pd can be used as stop losses on pared out shares

. Dont get overconfident and lazy! After 4 green trades or you will surely fail.

. When one level breaks. Focus on the next (ie: 15pd support, to a pivot or candle point or sticky levels). If your using the 8min MA for support and it breaks, go to the 13 min, then the 60 min chart.............

. OVERLAPPING Supports/Resistances are DOUBLE the power!

. NEWBIES: Prime Setups Only, Stay out of dead zone and last 45 min. You should hit 70% consistency on paper before going to cash!

. NEWBIES: Dont short under 20 or long over 80 stoch.. obvious..

. NEWBIES: Dont play the same # of shares on every trade. Gauge it with your risk/reward ratio and setup type

. NEWBIES: Increase your share sizes 100 fold every 2 weeks or so of smooth sailing

. NEWBIES: Earily long entries should be made on overlapping supports..shorts on overlapping resis

. NEWBIES: Be aware of support/resis levels on MA's, piviots, overlapping stuff, candles. 200MA, 15 & 5 Are support & resistance on all charts!!

. NEWBIES: Stocks move higher but still they need wiggle. Dont get spooked out

. NEWBIES: STOPS-Your trailing stop should always be below your initial entry point near 15pd ma support.

. CHARTS: For strong reversal wait for 2 candle indicators.

. CHARTS: 13 & 3 seem to work best for intra day trading. Too much noise on 1 min

. CHARTS: The more trending candles you have b4 a doji, hammer or top, the better

. CHARTS: Wait for entire bodies to close above resistance on breaks or support on breakdowns

. CHARTS: Connect bear lines on top of highs \, and bull lines on bottom of lows /

. LUKE: Buy or short when the 15 or 20 period MA is sloping 40 to 70 degrees. Not flat

. LUKE: Use stochastics without %D (k only) not dslow. His futures methods dont care about the crosses.

. LUKE: 1-to-2 is the minimum risk reward ratio you can accept.

. TONI: Buy 10cents higher then prior days high. Sell 5c below support.

5 RULES FOR LIMITING RED TRADES

1 - Dont fight the 8/13-min Stochastics and the trend when they match

2 - Dont play in light volume, if you do play light shares!

3 - Dont play tight channels they are usually consolidations

4 - Dont chase extreme stochastics bands. No longs above 80, no shorts below

5 - Dont fight the pivots or overlapping support/resistance levels

:Misc from UT site:

. Wait for pullbacks to buy shares on ranges

. Last hour: If your not GREEN by then, dont play.

. 100 Shares Play Light for 2-3 months

. Perception/hype drives small moves in stock

. Be profitable 4 out of 5 days. Then move up in share size

. Widen stops to account for wiggle on range/swings

. Wider time frame = less shares

. Make long enteries on LOW stochastics (0-20 range)

. Make shorts on top range stochastics (80-100 range)

. Use moving averages 5/15/200,stochastics, pivots and bollinger bands are all you need *n*

. Kryptonite of a PUP/Mini-fPup: Light volume and tight channels

. You can have a good setup with low or no volume and get screwed. (dead zone trading)

* Premarket UT Morning Preperation *n*

.Gauge noodles: Gauge 200 period MA's on 3/13/60 charts. Gauge piviots and any overlapping support/resistance. Use 5 days of data for 60 min chart.

.Find yesterdays HOD and LOD on noodles.

.Gauge trend of noodles and trend of channels

.Gauge stochastics of 60 min noodles specifically near 9:15am Use 5 days of data for 60 min chart.

.Economic Reports come out at 8:30am and 10am EST (on days with 10am report wait 5 minutes after to gauge noodles)

.Playing the open: best environment for scalpers in first 15 minutes, 80% gap exhaustion

Then gauge 13/60 min after 9:45am

. Remember: Grow slowly like an uptrend. Even stocks have wiggles and retracements/down days.

Do not dwell on your day. Every day is a clean slate

*STARTING OUT TIPS:

• Paper trade 1 minute Stochastics Bounces = 70% Consistency= 7 out of 10 trades

• Be BORED = APATHY = EMOTIONAL DETACHMENT

• DON’T WORRY ABOUT MAKING MONEY FOCUS ON THE TRADE not the $

• TREAT the 100 shares as if they were 1,000

• Duplicate 70% consistency for 1 month

• Slowly Increase Shares 100 shares at a time -- MAINTAIN comfort Level

• When feeling overwhelming anxiety, it means you are overleveraged, drop share sizes

• As you improve and start to consistently hit DAILY GOALS 7 out of 10 times, continue to increase shares

• When you got the SCALPS down cold

• Test out 3 minute ma breakouts on 1/2 lots

• Trade laggards in your SECTOR of basket stock, sectors MOVE together from TOP to DOWN, Leaders to Laggards

• Add a New Basket Stock in a different sector

* Miscalleanous Tips: *n*

*Non-Refresh/Iceburg order = Can do it on inca or insta net. Only shows 100 shares but you can have all the ones you want to share. Use in post/premarket or thin stocks you dont want to spook.

*Hidden/Invislable = order does not show up at all on level 2. Works on arca but limits order execution. Use in post/premarket or thin stocks.

*CARDINAL RULE: If buy/sell indicators oppose each other (macd, adx, volume etc..) look for another stock to trade

*Typical types of trading:

Scalping - Snatching penny profits (aka day trading) Less risk but larger shares

Momentum - Open and close trade within a trading day/day trading/intra-day etc

Swing - Hold a few days 2-7 usually but reduce risk by taking on smaller shares & wider stops

Position - Hold for a week or longer

Long Trm/Core - This one is obious

*TIPS: Exit Strageties

-When stock breaks initial trend line angle (although uptrend may not be broken)

-When stock makes 2 consecutive closes below 20 day MA exit

- ES or DIA will be used as hedging if CBT goes down. If CME goes down then use the YM for hedge. catastrophic failure: (bobbie hedges 1 ES for every 2 YM)

SEE section "Catastrophic Failure of Exchange going down" in Master Trade notes file for levels and values

-Catastrophic news.. duh

-Place trailing stops .10 to .25 below successive pivot low

-When stock makes a lower low exit

*UT TIP: Reversal plays are taking shorts on exhaustion peaks or longs on valleys. Counter trend plays are when you setup in after exhasution and look for a 3.5 strike brakdown (see 3.5 strike breakdown/up in setups)

*TIP: For short term trades--Check upgrade/downgrades & short interest (ibd, yahoo, briefing?)

*TIP: TRENDLINES, draw them (straight inclinded line) connecting lows to show support or resistance areas p113 ex

A flattening slope warns you to take some profits or pull out of your position

Draw trendlines on charts to help you indentify things

Steep trendline=good, shallow=trend tiring

Connect atleast 2 swing lows or highs. Confirm trends on 1 time frame.

*TIP: In a bull market, 3 out of 5 stocks will chase the bull higher. IN bear markets, as a rule, 4 out of 5 stocks will follow the bears downhill

*TIP: Take a partial position at the beginning of an uptrend. Once its confirmed you can always add shares to it

*TIP: Markets FALL faster then they rise. At about double the speed. This is why shorting is popular i'd say

*TIP: Transportation stocks typically rise when fuel prices lower

*TIP: In bull markets buy leading stocks in leading industries. IN bear markets shell short lagging stocks in lagging industries

*TIP: Markets tend to do well every 4th year on the presidental election years

*TIP: Small cap stocks tend to do well mid december through January due to end year bonuses, dividens etc

*TIP: Its always a good idea to check prior charts for support & resistance points when entering a trade! Buy as your target stock bounces off sopport, not after the stock has soared into the stratosphere. Sell short when your stock hits its head on resistance and begins to fall, not after the stock has tumbled in a cliff fall!

*TIP: Final few days in a month puls first two tend to product bullish bias/skew

*TIP: When a stock touches a horizontal -- trend line 3 or more times that price level is MAJOR support or resistance p120 ex

You can draw them to make channels. When stock deviates it tells you if its gaining or losing momentum

*TIP: Stock that forms a 2 or 3 month base has better odds of breakin into an uptrend

*TIP: Stocks usually retrace 50% of their last major move up or down. When the stock your holding corrects more then 50% it may be weaker or stronger then you anticipated. Consider downsizing or taking early profits.

*TIP: Dont play DROP the STOP. Leave your stops where you set them. Thats why they are there. Be diciplined

*TIP: Swing traders BEWARE: If you sit at your computer all day and watch a 5 min chart youre likely to micromanage your trade and abandony our plan and exit at the wrong time! Give it some time.

*TIP: If a stock cant break through resistance 2 times it will probably head lower

*TIP: Uptrend is broken if price falls to lower then previous low before trend

*TIP: If your stock GAPS UP two days a row on open. Sell on open and take profits

*TIP: TRENDLINES, draw them (straight inclinded line) connecting lows to show support or resistance areas p113 ex

A flattening slope warns you to take some profits or pull out of your position

Draw trendlines on charts to help you indentify things

Steep trendline=good, shallow=trend tiring

*TIP: Volume Preceeds momentum, ex p161 (come before)

*TIP: Rising OIL costs are a sign of inflation & can be negatative on equities. So if oil stocks soar, this may happen

XAU = Gold and silver index. In bear market enviroment commodities may go their seperate ways (good and bad).

*TIP: Fast moving averages rever to short terms such as 10-day, Slow are 50 to 200 day periods

20-period, MA for time period on intra day chart

20-,weekly moving average

20-day,daily moving average

Only sell short with stock moves below its 20 Day MA

*TIP: Use moving averages to determine flow of stock & piericing buy/sell points. Support areas when it dips below the MA line. Some traders use MA's as pure buy and sell signals (hence next line down)

*TIP: Exit CORE TRADES when stock closed below 20 day MA 2 days in a row or makes consistant lower lows..

*TIP: Dont enter stocks to the long term side unless they are trading above their 20-day MA. Setup a chart with the

20-day ma, the 60 min chart (5 day data), with 65- and 130- period moving averages. Expierment

A LOT of DAY TRADERS swear by 13-period moving avg on a 15 min chart. But keep your charts simple

*TIP: EFT Info Links: etfconnect.com, ishares.com, copy some ETFs in here via these sites.

EFTs are used for hedging a lot!

*TIP: Let a few days bypass on major entry points to confirm uptrend or not

*TIP: Steep up trends produce erratic downs

*TIP: SHORT stocks when--Stock is falling below its 50- and 20-day moving average. OBV is heading south. Stock starts to fall on strong volume. Other short triggers: Top Reversal, Price closes below avgs for 2 days, Volume increases on failure, MACD hook down

*TERM: When a downtrend starts to flatten it is called a shift in to basing mode

*SCAN TIP: High volume on pullback inuptrend=bearish, new high on weak volume=bearish

Soaring price+explosive volume = bearish. It will be good temporarly but will come down!

*SCAN TIP: Important low+strong steady volume=bullish.

To spot an important low watch for high volume as the stock moves down on a daily chart. Next look for continued strong volume as the stock holds its lows and starts back up. One to two weeksof this can be a strong bullish pattern

*SCAN TIP: Scan for bases with orderly horizontal price movement and steady volume! Longer bases tend to produce higher uptrend. Daily orderly bases that form on intra-day charters produce nice uptrends as well

anything 0 or above is good. A minus number is pretty negative

*SECTORS that do wellin bull market: [early bull] Transportation/Railroads,Trucking/Airlines,Technology, Capital Goods, Basic INdustry/Copper/Steel/Paper [late bull]

*SECTORS that do wellin bear market: [early bear] Consumer Non Cyclicals/Cosmetics Food, Health Care/Drugs/Biotechs, Utilities, Housing/Autos, Financials [late bear]

*Most setups arive from basic situation: breakout from consolidation, breakout from pullback, breakdown from rally, breakdown from consolidation

*Sell when market needs sellers, buy when market needs buyers (aka sell into buyers, buy into sellers)

*HOLIDAYS: .Dont hold a position over long weekend or holiday unless SURE

. Seasonally, we get light vol on the day after Thanksgiving.

*Use channel lines / / made from 5 & 15 period moving averages

*General: Keep an eye on the dollar, inflation and foregin markets occasionally

Inflation: of course rising is bad, 3-4% a year is normal. Anything more can be disaterous

CPI-Consumer Price Index=An inflation gauge that measures changes in the prices of consumer goods. PPI-Producer Price Index=Reported monthly, it’s an economic indicator watched closely by the Federal Reserve that measures inflation in wholesale goods like food, metals, oil and gas, etc.

*10am uptrends tend to occur

*PROTECTIVE stop calculation on risky trades before you enter. Good rule is commit no more then 25% of account to a single position. Sometimes good to set them under stocks previous days low

*Set STOP loss on each trade, 2% value of account is normal

*11:30 - 2:00 pm can product limited follow-through setups and low volume levels that restrict percision enteries and exits. Try to enter before this time.

*Be quick and aware of fading gaps (traders short on high opening gaps and buy on low opening dips but quickly)

You can try to fade the gaps by shorting or buying at the right times 85% of gaps that occur are faded!

Pay attention to candles! Some gaps do go higher.

Gaps usually faded within the first hour to hour and a half

Rule: Be cautious when fading a gap of a stock that goes up 4.5+ points and normally only moves pennies a day.

Check the news first on this type of stock.

*Big gap after hours on good news usually continue for 30-50 more cents on open. (ex: ANF on 11/16/05) *n*

*Stocks move up or down if a buyer is willing to buy more stock then is available at a given time

*Low Volatility stocks good for day trades=Utilities below $25/share, Real Estate, Trusts, Closed end funds

Avoid extremely volitale stocks when trading in the teenies (Microsoft, bigger companies)

*Set adiquate but low times on limit orders (hour or less)

*Money market funds arent insured

*Trading hours: 9:30 to 4:00pm (Try to hang back first and last half our on voliatle stocks)

Premarket: 8:00 to 9:30am (Must use limit orders and + time frames) (open 6:30am soon?)

Premarket may short sell without uptick!!

Postmarket: 4:00pm to 8:00pm (Must use limit orders and + time frames). post-market

Post-market: no orders can go off on the bid *n*

http://dynamic.nasdaq.com/dynamic/afterhourma.stm - Most active post market stocks

Forex: Sunday 6:30PM EST through Friday 4PM EST.

*TIP: Market Clock Generalization:

8:30-9:30 Premarket Analysis

9:15-9:30 Crank reversals

9:30-10:00 The Open (Scalps Only)

From 10am to 11:00 am is usually post open and the action slows down as Jay looks more for consolidation breakouts, cup and handle formation breakouts and power uptik breakouts. Action slows and swings can be implemented during this period. Mood shift. Mood shifts are times of the day when potential reversal can happen. Look for 2 coil moves on the second coil. May be a mood shift in here too. 10 o clock a lot of stocks gap down or reverse

11:15 – 1:30pm is what we call DEADZONE. Volume slips and liquidity slips which means momentum usually slips. Traders are off to lunch and this is usually the time where newbies will get headfaked and overtrade. We cannot stress it enough that traders should NOT OVERTRADE during this period. There are a lot of fake spread movements (market makers like to uptick and move spreads fast on very little volume) and there is a lot of faking and illusive stock moves and it is best to leave this period alone unless you are a seasoned scalper. Exercise here! Be back by 1:30p!!!!!!!

1:30 - 2:00pm Mood shift. Mood shifts are times of the day when potential reversal can happen. Look for 2 coil moves on the second coil

2:00-3pm is post-Deadzone. Volume starts to return and the trend for the afternoon session gets determined during this time. We look for consolidation breaks on stronger volume during this time period.

3pm – 4pm *n* last hour. (Scalps) This is where the volume peaks again and the real action commences for the end of the day. 3:30pm- 4pm is as volatile and fast as the first ½ hour as traders try to find gappers and momentum breakouts. 3PM bond market close. If your not GREEN by then, dont play.

BOOK: THE LOGICAL TRADER - Mark Fisher (jeck rec.)

"If anybody thinks that trading isn't anything more than a form of gambling, they're kidding themselves."

:Terms:

. ACD = See methods

. B & D points = STOPS for A's and C points. Usually set at the opposite range of what triggerd the A or C. If you had an active A UP your stop would be the lowest end of the opening range.

. slippage = diff between target price and fill price

. bus people = sheep, average investor

. daily pivot range formula = High+low+close/3=Daily Pivot Price. High+Low/2=Second Number. Differential = Daily Pivot price and Second Number. Daily pivot price plus or minus pivot differential = DAILY PIVOT RANGE!. p38 has example

. Island Reversal Formation = For example in a downtrend, the Island reversal formation is formed when the middle (second) candle gaps down from the low of the previous candle. At this point the bears will still feel assured that they are in control, however this candle will turn out to be a small candle with little range. It is the third candle which signals the reversal as this candle will gap upwards from the high of the second candle to open as a clear candle which closes near the top of its range.

. MAD = moving average divergence

. DSI = daily sentiment index. Find some online

. TRT = trend reversal trade (not the bus)

:Methods:

. ACD - These are just trigger points but his system is called ACD. A=Entry, C=Entry, B&D Are stops! Pick a time frame, say 20 minutes. Take the high and low of that 20 minutes and if the stock rises 8 ticks above the high of the 20 minute range & stays there for atleast half of that time (that would be 10 minutes)then you have an "AUP" if it goes below the low of the range you have an "ADOWN" The C up or down comes in when the AUP peaks out, exhausts. Goes through the B point and crosses the other end of the range. C up or down ticks are the same. 8 ticks above or below hi/low. They differ for commodoties (silver, crude). See p 18

- Gauge on 3 min or 5 min chart. Usually at 9:50 for stocks (first 2 min)

- There can only be one a up or down per day as for c's as well. There can not be an A UP and A DOWN. It would be A UP, C DOWN

- Remember, point C is always in the opposite direciton of point A

- Establishing a short positon on a failed A up or a long position on a failed A down provides the potential to make a profit that far outweigs the risk.

- If you have a failed C down and you decide to take a long a few ticks above it your stop would be that C down point

. Pick your time frame and stick with it!

. Time/premise always more important then price

. Pay attention the slope angle on MAs

. Look for gaps after holidays. People get ansi to sell/cover

. Jeck uses 10m open range

. Stick with your premesis!

. Markets That Dont Meet Their Call - This means for ex at night gas trades up 10 cents however when market opens its only up 6 cents. This is a warning sign market is likely to reverse course.

. If no one has a clue why the market is moving in a certain direction then stay in the trade. When the news comes transparent to everyone then get out!

. Good news can result in lower stock price. Good News/Bad Action!

. Dont enter a trade if you have the same signal for 3 days in a row. Why? Because pro traders usually hold positions 4 hours to two days. Those who established positions durning day 1 are already getting out for a profit. Reversal may be pending.

. If you have a failed AUP you can still then have an ADOWN. Since there was really no official AUP

. Number line scoring (pages 83-96):

+2 AUP Occured & Closed above Open Range

-2 ADWN Occured & Closed under open range

+2 AUP Occured, C Down Attempts but Fails due to cross not time being half opening range. Closes abv opening range.

-2 ADWN Occured, C Up Attempts but Fails due to cross not time being half opening range. Closes below opening range.

0 AUP Occured but failed to close above opening range

0 ADWN Occured but failed to close below opening range

+4 ADWN Occures then reverses, C UP occures and closes end of day above opening range

-4 AUP Occures then reverses, C DWN occures and closes end of day below opening range

0 ADWN Occures then reverses, C UP occures and fails to close above opening range

0 AUP Occures then reverses, C DWN occures and fails to close below opening range

0 AUP Fail, ADWN Fails due to cross not time being half opening range

0 ADWN Fails, AUP Fails due to cross not time being half opening range

-3 AUP failure--Price doesnt trade above AUP line for half the opening range period. Closes below opening range.

+3 ADWN failure--Price doesnt trade below ADWN line for half the opening range period. Closes above opening range.

+3 AUP Occured. C Down Fails. Closes in opening range

-3 ADWN Occured. C Up Fails. Closes in opening range

-1 AUP failure--Price doesnt trade above AUP line for half the opening range period. Closes in opening range.

+1 ADWN failure--Price doesnt trade below ADWN line for half the opening range period. Closes in opening range.

-1 AUP failure--Price doesnt trade above AUP line for half the opening range period. Closes below opening range but doesnt hit A DOWN

+1 ADWN failure--Price doesnt trade below ADWN line for half the opening range period. Closes above opening range but doesnt hit A UP

. Late day point C pivot trade usually results in a gap the next day. Good time to hold over night

. First trading day of the month can be used to set direction for long term trades

. When a "down" or "up" is near a pivot range that fails then inrease your size. This is a good trade.

. Check weather the market had a plus or minus day 30 market days ago. History repeats itself.

. 5 ACD Rules should IMPROVE your TRADING

1) Plot Point As and Cs as points of refernce

2) Lean against these reference points as you execute your trades

3) Maximize your size when the trading scenario is favorablel. At all times, mimize your risk

4) Know where you are getting out if you're wrong.

5) If you can answer 4, you will trade with confidence.

:Other:

http://www.thelogicaltrader.net/

BOOK: High Probability Trading by Marcel Link

Ask Yourself:

Did I have a good reason for that trade?

Did I think it through properly?

Do I know how much is at risk?

Am I trading the right number of shares?

Did I wait for the golden opportunity?

Am I trading witth the major trend?

. E-Mini S&P 500 Easily moves 20pts in a day so give stops room! Its more volitatle. Consider this in different stocks. Check volume. Atr etc..

. Never place a stop on: A WHOLE NUMBER, TRENDLINE, MOVING AVERAGE, HIGH OR LOW OF THE DAY/WEEK, 2.50, STICKY, STINKY OR ANY OTHER IMPORTANT SUPP/RESIST LEVEL. IT WILL GET HIT UNNECESSARILY.

. Place STOP at previous days low or major low. If you cant figure out where else to put a stop. Look at larger time frame.

. Use 'real' stops until you build your dicipline. Mental stops come later.

. Be able to see the increased volume in moves as compaired to wiggles

. Rule of thumb! When market breaks out of consolidation the break will be about as long as the congestion/consolidation area is wide.

. Setup different scnearos in advance (if it does this then bla..)

. ATR = Average True Range. Daily point motion of a stock. Calculate it into trades before taking big risks on new stocks. Look at weekly chart or use an indicator. If a stock has an atr of 4 and its moved 3.75 up then dont be looking at a long. Yes there are days where it will go $5 but you want to work with probabilities not flukes. Fold 2 7 os! even though the flop may be 2 2 7

. Trading multipule positions its important to pick stocks that dont move together. Ex: corn, crude, sugar, copper, swiss francs. If you dont then your essientally just marrying one large position. If that sector moves against you then you will suck again. Or hedge the same position (see catastrophic)

. Pyramid Properly - Start with a base (200 shares etc) and add on 75 then 50 then 25. Don't start small then add big shares on or you will topple over when the stock retraces. Think of the pyramids in egpyt upside down. They'd surely topple!

. Pretend your outside your body looking over your own sholder to get a fresh perspective of the market. If these werent your positions how would you like the market? Don't get biased.

. Ask yourself: If I had no position what would I do? Do I get angry too easily? Do I let my emotions get the best of me? Are personal problems affecting my trading? How do I deal with a losing streak?

BOOK: Trading for a Living by Dr. Alexander Elder

* Prices seldom rally very hard immediately after a decline. They need time to recover.

* Trendlines/Channels: When prices rally, draw an uptrend line across the bottoms. When prices decline draw a downtrend line across the tops. When prices are in sideways consolidation use rectangles on top and bottom and wait for breakout. Make channel lines on up and downtrends. Wait for slip or peak. This method works pretty good.

* S&P 500 Futures ES - Opening gaps are almost always closed on them.

- They move in mirror with SPY and somewhat with $TRIN

* TURN OFF P&L columns when in trades--Emotional detachment.

* RISK: Don't ever risk more then 2% of account on a stop.

Play less shares or a more profitable looking setup. See below:

Ex: E: 45.50, T: 46.50, Account Equity: 15,000 ($300 max risk at 2%)

S: 45.10 40c stop at 800 Shares = $320 Risk - NOPE NOT OK

S: 45.30 20c stop at 500 Shares = $100 Risk - ACCEPTABLE

* Journal Trade Review Questions to ask YO'SELF:

. Have you identified a good trade?

. Which indicatiors were useful and which did not work?

. How good was your entry?

. Was the initial stop too far or too close? Why and by how much?

. Did you move your stop to break even level too early or too late? Paired?

. Were your protect-profit stops too loose or too tight?

. Did you reconginzie the signals to exit a trade?

. What should you have done differently?

. What did you feel at the various stages of the trade?

. This analysis is an antidote against emotional wreckless trading.

STEVE NISON BOOK - "The trend is your friend"

:Terms:

consummate=extremely skilled and accomplished <a consummate liar> pr: con-summit

tome=a volume forming part of a larger work

gusto=enthusiastic and vigorous enjoyment or appreciation

box range=consolidation. put stops over or below these ranges, stochs moving sideways tight weave in and out

confluence=coming or flowing together

pundit=learned man/teacher

bearish belt hold=candle in downtrend mostly black opens near high of session and closes at or near the low. p56

bullish belt hold=reverse of bearish belt hold p56

high wave candle=long upper and lower shadows and a normal body

candle line=one candle (the whole jimmy)

3 black crows=oppotiste of 3 white solders. 3 big white sticks in a row

raising window=bullish-entire space of window is support. bottom is critical support

falling window=bearish-entire space of window is resistance. top of window is critical resistance

fading gap=duh. people make a living from this

:Methods:

. Rectangle Breakouts or breakdowns! Look for these. Draw the trend lines

. Always confirm candles close under support or above resistance for trend continuation

. Use tools to find support: pivots, your eyes, linear regression, candles, longer time frames, sticky/s etc,windows

. Spinning tops show indicision. Wait for next candle to chart

. Long upper shadow=selling pressure (bears), Lower shadow=buying pressure (bullish)

. Shooting star (at uptrend BR) and hammer body (after downtrend BL) can be black or white

. Shooting stars occur when mkt is in an uptrend

. Hanging man sell signal: Wait for next candle to close under his real body (not shadow)

. Doji: When numerous form in a row, it is viewed as unimportant. Also if in consolidation range ignore doji

. Northern doji signals are better/more important then southern doji

. Series of long lower shadows shows the market is decending reluctlantly

. Dark cloud cover: A close over the highs of this pattern would surely be a reson to exit any shorts

. Shaodows not need b engulphed in the bull/bear engluphing patterns. Only bodies

. Bottom of hammer should be support

. Hamari cross portrays more likelooh of reversal then traditional harami

. A mini pup climax above the 80 band statistics on the long side at known resistances is

a good part to short because there will be a small pop up, then you absorb that, it breaks back down then you take profits. guard the 5min avg (pair out there, or sell)

*PATTERNS ON CHARTS: (Some examples of these in mulah directory)

* Rectangle Breakouts or breakdowns! Look for these. Draw the trend lines

------------- /

/\/\//\/\/\/\/

--------------

Double Top: (Looks like an M), p126, Halts uptrends

Head and Shoulders:, Another top reversal pattern

Double Bottom: Reverse of double top, break out pattern W (cover short positions!)

Reverse Head And shoulders: Need I say more

Cup-With-Handle: Looks like coffee with handle. Bottom reversal pattern.. yippie

Line-Continuation pattern=looks like a make a top 10 volume/move w/ trade ideas, triangle and should last 3 weeks or less

Candle Sticks:

Too many to put in here. For examples go to the cheat sheet or the back of The Candle Stick Course by Steve Nisson

Strategies

Expirmental Strategy

+ I'm thinking still

+ More random picking ideas in prospects txt file

Some Swing Trade Setups

News pops on earning/upgrades downgrades

CNBC mentions. Jackass cramer pops

Leapfrog Setup p280

Scan for a stock that is in an Uptrend on a daily chart

Stock pulls back to 20 & 50 MA. under the price pattern and moving indicators show bullish divergance

Then a small top or range candle

Check stochastics and OBV to be positive

If the next day is positive, buy!

Draw a downtrend on the tops of the pullback candles

Stealthy Sidewinder Setup p283

Look for a stock trading in an uptrend on a daily chart that is consolidating in a tight wedige or horizontal flag or ascending triangle. The price pattern rides just above the 20 day MA and ideally above the 50 day. The OBV should read positive. Wait for a long white candle then buy in with a protective stp

AVOID consolidation flag patterns that slant to the upside or end in lower lows. Ex:

--------

/\/\/\/\ Ok Consolidation Pattern

--------

/\ /\/ Not ok.. Ending in lower lows at some points

/ \

Draw consolidation tops and bottoms/trendlines. Like channels. Like in the above first example.

Start with the most recent low & go backwards in time. Same with a highs pattern.

Anytime you see a stock pull back to a moving avg support then end in a spinning top or small candle, GET READY for an explosion.

Momentum/Day Trade Setups/Rules

(SETUP) If a stock gaps down in the morning it may brake out to fill that gap. (gap up may fade, shorting opportunities)

Pay attention to candles! Some gaps do go higher. Day Trading is grand.

(SETUP) Three Lane Highway = *n* A setup where the 3/13/60 minute stock & noodles stochastics are moving in the same direction on the noodles and or your stock. Including the 5 & 15 moving averages!! The 3 min will usually turn to indicate entry 3lane highways are prime setups, watch the 60 minute, gauge the 13 min and time entry with the 3 minute. Use 5 days of data for 60 min chart. 5 Should ride above 15 on longs and below on shorts!!!

(SETUP) Buy and sell on stochastics %K %D method (preiods below)

Buy when %K rises above %D, Sell when %K descends below %D

(SETUP) 3.5 Strike reversal (after uptrend ex) Strike1-5 Period stops making progress and stalls/peak. Strike2-15 Period stops making progress/5 tightens towards 15. Strike2.5-is fades a noodles stochastics bounce Strike 3.5-Retracement coils back and forms a mini inv pup casuing a breakdown and reversing the trend. Reverse for downtrend reversal

http://www.undergroundtrader.com/training/jays_methods2/sld017.html

darnIT all this is be a noodles fade move we been jumping in on! Ie: Stock sell fades the noodles and finally burst out with the noodles take a pop or mini pup

(SETUP) Set a 5 and 15 PEROID Moving average buy when 5 crosses up over 15 period, 3 Minute Day chart (Undergroundtrader)

(SETUP) Double Got um Straight Setup (Day Trade) p276

Double got um is the bounce of the retest of a low.

Look for a stock that had a downtrend, fell to a low, rebounded back. Now 8 or more days later price is retesting that low.

Buy on uptrend on new lows.

Set protective stop (always duh)

Check previous resistance

Major company only

(SETUP) The Moving Average Hot Blanket Setup (Day Trade) p287

Look for a stock in a downtrend with the 50 & 15 day MAs (50 will ride above the 15) creating pressure from above the price pattern. Look for a stock that has consolidated into or rallied into a moving avg trend line. You want to enter intra day trades when stock crumbles under resistance and starts to tumble. You'll see a long dark candle form. Inverted hammer or top.

(SETUP IRC)

[20:35] <Jay> the ONLY trade you will EVER MAKE

[20:35] <Jay> no matter how long you gotta wait

[20:35] <Jay> be it hours to days in between trades the only perfect trade/play

[20:36] <Jay> is a 3 min MA PUP breakout with a n under 50 band stochastics, 3 min coil AND a 3min MA uptrend or consolidation PERIOD

[20:36] <Jay> triggered by the 1 min noodles LOWER band coil

[20:36] <Jay> PERIOD

[20:36] <Jay> thats it

[20:36] <Jay> you would outnumber your GREEN to red trades 8 to 1

Day Trading Rules:

* Set day trading stops .10c under first 5 minute low or hey how about this, under a previous support level

* The MIDPOINT of a long extended candle frequently acs as support or resistance. Chart ex p 286

* Chart configurations & Notes *

Chart Settings - Chart Setups Etc ...

:Stochastics:

UT TIP: Use Stochastics MA for periods 1, 13, 60 (5 day data) for noodles & basket stocks.

UT TIP: Let triggerline fully cross first *n*

Jay: 15,3,5/%K is the fat blue line (5pd) on esig.

:CCI:

20,c CCI

:Bands:

UT TIP: Dont play tight channels (Bollinger 20,2)

:Williams:

Default

:MA's:

Scalping: 5 and 15 (34 wave optional) period, TIME: 1 Minute 1 Day on Chart

Swing: 5 and 15 period, TIME: 3 Minute 2-3 Day on Chart

:MACD:

12 Length, Signal 9 (buy when indicator yellow crosses over aqua signal line)

(12,26,9 esignal video)

60/13/3/1 Minute Charts

60/13/3/1 Minute Charts provide a 'doppler effect' 13 view from a building, 60 birds eye view.

Rule: Dont fight the 8/13 minute stochastics moving avgs when they match

Rule: If the 60 min (5 days of data) shows a PUP, expect the 13 to follow through

Rule: If the 13 min shows a PUP, expect the 3 to follow through *n*

And so forth..........

Use 5 days of data for 60 min chart.

----------------------------------------------------

######### Futures - 0.4

-----------------------------------------------------

Futures/E-Minis Tips:

Advantages: 60/40 tax rule, short on down tick, don't have to list each transaction individually on taxes, less slippage, good market execution, low spreads, no 25k rule, good leverage, can trade in IRA account.

- Futures Hours: Pauses for 30 minutes between 4:15 and 4:45 PM ET. On weekends, trading stops at 4:15 PM ET on Fridays and then resumes at 6:30 PM ET on Sundays

- Watch tick, trin and all that stuff when trading futures because your trading the leader.

- Don't hold over night

- Quarterly Contract end codes: March-H, June-M, Sept-U, Dec-Z

- Other months: Jan-F Feb-G Mar-H Apr-J May-K Jun-M July-N Aug-Q Sept-U Oct-V Nov-X Dec-Z

- Make sure you got right esignal code. dont use NQ #F no mo!! (ex NQ H6)

Links: nfa.futures.org, www.cme.com (find broker)

Trading Times for Charts:

CME = 8:15pm-5:00pm

CBT = 4:30pm-4:15pm

Symbols: More info: http://www.cme.com/trading/prd/contract_spec_ER713.html

NQ - Nasdaq $20 per full point / Mirror QQQQ / .25 tick increment or $5 a tick

(1 NQ contract is equiv to 800 QQQ's shares). 1 Full point is $20

Time setting hours: 4:30pm end 4:15pm

ES - S&P 500 CME $50 per full point / Mirror $TRIN & SPY / .25 tick inc or $12.50 ($50/pt)

(1 ES contract is equiv to 500 SPY shares)

Daily range is usually between: 8-15pts

Time setting hours: 4:30pm end 4:15pm

YM - Mini Dow CBT $5 per tick but its volitale! / Mirror DIA / Normal increment

(1 YM contract is equiv to 500 DIA shares) 1 tick is 1 point on the YM so its $5/pt

YM sometimes used for gap fading if gap > 10 pts

Time setting hours: 8:15pm end 5:00pm

Daily range is usually between: 80-150pts

AB - Russell $100 per full point / $10 per tick in .10 incriments ($100/full pt)

Ex: You'll see it go 698.20, 698.30, 698.40 etc..

AB (sometimes russel is ER) IWM mirrors

Time setting hours: 4:30pm end 4:15pm

Daily range is usually between: 5-9pts

MC - Mini S&P 400

NG - Natural Gas

ZG - Full sized 100oz gold

GC - Gold futures

HG - Copper (high grade)

PL - Platnium

PA - Palladium

YG - Mini gold

ZB - 30 year bonds, Daily range is usually between: 25 to 50 ticks

US - T-Bond Futures

ZN - Ten year notes (check patterns on these)

S - Soybeans (S M6 etc)

C - Corn

W - Wheat

EC - Euro Currency ($12.50 per tick),Daily range is usually between: 80 to 150 pips/ticks

CL - Crude Oil

QM - Crude Oil Mini

See list in Research & Lists Dir for other symbols

---------------------------------------------------

######### Forex - 0.4b

---------------------------------------------------

TRO: I know to enter a trade when the euro is at 1.xx00, 1.xx25, 1.xx50 or 1.xx75 because THESE ARE PSYCHOLOGICAL PRICES.

Recent: EURAUD has been good with daily CTC squeezes lately

Nostradamus: Directional forex compass from forex.com site. Check it out

Forex: An over the counter market where buyers and sellers conduct exchange of foreign and domestic curriences. UK JP & US account for 70% of forex trading. No comission is required. Brokers hike up the spread to make money.

Trading Hours are: Sunday 6:30PM EST through Friday 4PM EST.

Overall forex are the best markets to trade but you should be a seasoned trader before attempting them. 1 mini forex lot is $10,000

Questions:

Market Open Times EST:

ORDERS ACCEPTED: Friday 4:30pm Forex closes, Sunday 5am Opens

New York 8:00am - 5pm

NYSE Equities 9:30am - 4pm

Australian 5:00pm - 2am

Tokyo/Asian Open 7:00pm - 4am

Eurozone 12:00am - 9am

European 2:00am - 11am

London 3:00am - noon

Note: These 4 opens provide volitility 4 times a day. Nice eh?

Stops: * Estimate this out based on the price/past volatility of the currency pair. (no more risk then 2% of account equity)

* Figure out by mutiplying loss pips by lots

* Of course you want to place your stop under a support, trend line, ma but make sure its not risking over that 2% of the account

* DJ thinks 50pips stop for forex swing is pretty good. Thats about 2% of my acct. Still good to pull up chart for atr of candles

Targets: * 100 PIPS or closest resistance level

* Up stop to break even at half target hit

* Kinda playing with this still.

Misc Notes:

* Gap fills are usually from close on Sunday. Power point seminiar page 126

* The Euro (EC #F) does the exact opposite of the dollar

* DJ uses box plays on the euro 1m time frame for beginners (p311 power point)

Symbols (add a0-fx in esig):

USD - US Dollar (Duah!!)

GBP - Great Britain Pound

CHF - Swiss Frank

JPY - Japanese Yen

CAD - Canadian Dollar

EUR - Euro Dollar

AUD - Australian Dollar

ZAR - South African Rand

NZD - New Zeland

Times: The largest volatility in the GBP tends to be in the early morning. Another good time is the Tokyo Open. Trading between 9:00 PM and 12:00 midnight eastern time can be OK.

Brokers:

** MAKE SURE THEY HAVE 0 BALANCE PROTECTION **

http://www.interbankfx.com/ - low spread/They have automated trailing stop. There 0bal protect response was a little sketchy. May want to ask again

http://www.forex.com/ - Has 0 bal protect, DJ recomends. Pips 1 higher then interbank

http://www.fxcm.com/

http://www.xpresstrade.com/

Margins: Has incredabile high margin ratios for good leverage. Accounts can be funded with $1000 and sometimes less

IB FX:

IDEALPRO - Tighter spreads but a pip or 2 but minimum $25,000 transaction

IDEAL - No minimum transaction, little bit bigger spreads

50:1 Leverage - Forex info: 50:1 Leverage - http://www.interactivebrokers.com/en/trading/marginRequirements/currency.php?ib_e ntity=ca

$2.50 Charge per forex transaction

2 PIPS per each forex transaction (0.0002)

Technical Analsys: Curriencies etch more well defined patters on charts then most stocks. There are usually no gaps on charts.

URL: www.dailyfx.com forex info

PIPS: # the smallest unit of price of a currency. One ten thousandth (0.0001) of a currency unit. Also known as ‘basis points’.

find broker with small BID/ASK spreads (this is how they dick you out of mulah). 100 PIPS or ticks = 1 full cent

CROSS CURRENCY: A pair that doesnt include USD as one of the symbols

cable: Exchange rate between USD and British pound

tank: EUR/GBP cross. Cable goes up when tank goes down usually

kiwi: NZD/USD - NZD short when dollar is strong vice versa

combo: $/CHF and GBP/$. "the combo" is trading one direction in the GBP/USB and the opposite direction in the USD/CHF

$DXC - Dollar index. If its moving higher then USDJPY USDCHF AND USDCAD should be moving higher. This action will push EURUSD GBPUSD and AUDUSD lower.

Downfalls: Must move up/down over 4cents (or spread) for you to make a profit.

No level II screen, data and news.

Must focus on just charts more. (this may be a good thing)

Large margin allows trading power but huge losses

Examples: Currency pair is USD/JPY. The base currency is USD 1.0 value. Quote currency is JPY. Your betting that JP will go higher or depreciate against the dollar if you buy this pair or that the USD will appreicate against the Japanese Yen. If exchange rate of JPY jumps from 1.35 to 1.36 then it is more expensive to purchase a dollar with JPY currency. JPY has depreicated against the dollar thus the USD has appreicated p317 TONI

Pair: USD/JPY

We buy if we think USD will appreciate in value

We sell if we think USD will depreciate

Standard pairs (ral also usess) are GBP/USD and USD/CHF

These are due to standard internet bank relation ships.

Price Effected By: Interest Rates, Unemployment,Inflation News, GDP, money supply

*TIP: Watch atleast 2 pairs so your not forced into one trade

Forex Glossary: http://www.razorforex.com/public/department33.cfm

General Helpful Notes on Forex

- When $DXC Dollar index is moving higher then USDJPY USDCHF AND USDCAD should be moving higher. This action will push EURUSD GBPUSD and AUDUSD lower.

-------------------------------------------------

######### Options! - 0.5

-------------------------------------------------

OPTIONS = (see also futures) An option is a contract which gives the buyer the right (but not the obligation) to purchase (or sell) the underlying STOCK/SECURITY at a specific price (strike price) for a set period of time. If the option is not exercised by this set date, it expires and no longer has value. The investor pays a premium in order to get the option. Options only trade during normal market hours 9:30-4:00.

There are two basic types of options: Calls and Puts. "Calls" give the contract holder the right to buy the underlying stock for the Strike Price. I always think of buying a call as reserving the right to call the stock away from the seller. "Puts" give the contract holder the right to sell the underlying stock for the Strike Price. The Strike Price is the price per share at which the underlying stock can be bought or sold by the holder if he/she chooses to exercise this right. Call anticipates an UPTREND in price. Put anticipates a DOWNTREND in price.

Calls increase in value when the price of the underlying asset goes up. Above strike price more $.

Puts increase in value When the price of the underlying asset goes down. Below strike price more $.

Stock options points move dollar for dollar when its in the money, not before. The value before strike point is called time value. Calls value = underlying -strike price. Puts value = strike price - underlying.

Once a position is opened ("Buy to Open" or "Sell to Open"), it remains viable until it expires, unless a closing transaction ("Buy to Close" or "Sell to Close") is made. If a closing transaction is not made before the expiration date, one of two things occurs at that time. 1) If the option is "in the money" (for the contract holder, not the issuer), the option is exercised and shares are bought/sold for the agreed on price. 2) If, however, the option is "out of the money" (for the contract holder, not the issuer), the contract simply expires with no further action. Either way, the issuer keeps the premium.

People who buy options are called holders and those who sell options are called writers; furthermore, buyers are said to have long positions, and sellers are said to have short positions. Writers are obligated to sell/buy when contract is up. Holders are not. They can exercise if they want. Never write calls that would produce a loss (duh)

Close short positions ahead of long positions to avoid unacceptable risk.

Options traders succeed if they know when to fold.

-When re-entering on long option triggers only risk half of your previous gain. If you made $1000 only risk $500

-Set your stop at 1/2 your premium paid. If bought calls for $800, set stop to $400.

Always take into consideration when trading options:

Orig price of stock

Time before its worthless!

Premieum paid 2 u

Time & intrinsic value

Exp time

Return

Objective of owning stock/risk of all outcomes

Styles = American-style options allow the option buyer to exercise the option at any time before the expiration date.

European-style options do not allow the option buyer to exercise the option before the expiration date.

As a rule, stock options are generally American style. Futures options are generally European style.

Dual Contracts=You can buy a married put and write a covered call on the same stock?: Yes but consider the risks first.

exercise=Act on terms of the contract! Most exercisies occur at or near eXpdate..

Avoiding exercise:

cancel option (buy it back or sell it if own it)

rewrite anudder call later exp

this called roll forward or downard

Stock falls n u buy call back lower price. Aka roll down

pricing options = STOCK PRICE minus STRIKE PRICE = TRUE OPTION VALUE. Everything else left in option price is time/volitility value and is eroding! Ex: CSCO trades @ 13.46, Strike Price is 12.50. True option value is .96c Option price 1.30, .34c is premium

Dont Hold options more then 5 days or time will errode.

More techniques (straddles & spreads at link)

http://www.undergroundtrader.com/archives/index.cgi?channel=Seminars&month=03&day=27&year=2003

intrinsic value= This is the value that any given option would have if it were exercised today ONLY if its trading above (call) or below (put) the strike price!! It is defined as the difference between the option's strike price (X) and the stock's actual current price (CP). In the case of a call option, you can calculate this intrinsic value by taking CP - X. If the result is greater than zero (in other words, if the stock's current price is greater than the option's strike price), then the amount left over after subtracting CP - X is the option's intrinsic value. If the strike price is greater than the current stock price, then the intrinsic value of the option is zero--it would not be worth anything if it were to be exercised today (please note that an option's intrinsic value can never be below zero). To determine the intrinsic value of a put option, simply reverse the calculation to X – CP.

Premium will go down in $ if stock goes down (call) opp for put.

time value=That portion of an option's premium that exceeds the intrinsic value. The time value of an option reflects the probability that the option will move into-the-money. Therefore, the longer the time remaining until expiration of the option, the greater its time value. Also called Extrinsic Value. Time value declines w/ time

Taxes: Deep in the money calls incur more taxes

Long = Holder of Option

Short = Seller/writer of option

Strike Price = The price at which an underlying stock can be purchased or sold is called the strike price. This is the price a stock price must go above (for calls) or go below (for puts) before a position can be exercised for a profit. All of this must occur before the expiration date.

Buy to Open button - Open a New Options Position in a call or put contract. You will be holding!

(Pick a "call" or "put" quote SYMBOL respectively from the option chain list)

Calls -- When you "Buy to Open" a Call, you gain the right to buy a set amount of shares at the Strike Price anytime before the expiration date. This action anticipates an upward rise in stock price.

(Example: For stock XYZ, you buy one (1) option contract (+XYZFX) -- which is an XYZ July 50.00 Call. For this option, the Strike price is $50.00, and the premium is $3.50 per contract (or $350.00 where one contract equals 100 shares). You would pay the premium of $350.00 for the option up front. Thereafter, you would have the right to buy XYZ stock for $50.00 per share (or $500.00) anytime before the contract expires, although you are not obligated to do so.)

Puts -- When you "Buy to Open" a Put, you gain the right to sell a set amount of shares at the Strike Price anytime before the expiration date. This action anticipates a downward fall in stock price.

(Example: For stock XYZ, you buy one (1) option contract (+XYZRX) -- which is an XYZ July 50.00 Put. For this option, the Strike price is $50.00, and the premium is $4.50 per contract (or $450.00 where one contract equals 100 shares). You would pay the premium of $450.00 for the option up front. Thereafter, you would have the right to sell XYZ stock for $50.00 per share (or $500.00) anytime before the contract expires, although you are not obligated to do so.)

Sell To Close button -- This action closes the options position created above (if executed before the contract's expiration date). This is what happens for:

Calls -- When you "Sell to Close" a Call, you sell your option at the current premium price.

(Example: You own (1) option contract (+XYZFX) -- which is an XYZ July 50.00 Call. For this option, the Strike price is $50.00, and the premium at the time of purchase was $3.50 per contract (or $350.00 where one contract equals 100 shares). You sell the contract for the current premium price of $2.50 (or $250.00) . Since you bought the contact originally for $350.00, you would lose $100.00 in this transaction.)

Puts -- When you "Sell to Close" a Put, you sell your option at the current premium price.

**********************************

Sell To Open button -- Opens a new position in a call or put. You will be writing so its the opposite/reversed--because your on the writing/selling end of the contract. On calls your agreeing to sell shares to the holder and on puts buy from the holder of the contract.

(Pick a "call" or "put" quote SYMBOL respectively from the option chain list)

Calls -- When you "Sell to Open" a Call, you agree to sell a set amount of shares at the Strike Price (if the underlying option is exercised) in exchange for a premium paid up front.

If you do not own these shares when you sell the contract, the option is considered a "Naked Call".

(Example: For stock XYZ, you sell one (1) option contract (+XYZFX) -- which is an XYZ July 50.00 Call. For this option, the Strike price is $50.00 and the premium is $3.50 per contract (or $350.00 where one contract equals 100 shares). You receive a premium of $350.00 for the option up front. Thereafter, you agree to sell 100 shares XYZ stock for $50.00 per share(or $500.00) anytime before your option contract expires, should the holder of the option exercise this right.)

Puts -- When you "Sell to Open" a Put, you agree to buy a set amount of shares at the Strike Price (if the underlying option is exercised) in exchange for a premium paid up front.

(Example: For stock XYZ, you sell one (1) option contract (+XYZRX) -- which is an XYZ July 50.00 Put. For this option, the Strike price is $50.00 and the premium is $4.50 per contract (or $450.00 where one contract equals 100 shares). You receive a premium of $450.00 for the option up front. Thereafter, you agree to sell XYZ for $50.00 per share (or $500.00) anytime before your option contract expires, should the holder of the option exercise this right. )

Buy To Close -- This action closes the position created above (if executed before the contract's expiration date).

Calls -- When you "Buy to Close" a Call, you buy back the contract you previously sold at the current premium price.

Puts -- When you "Buy to Close" a Put, you buy back the contract you previously sold at the current premium price.

Covered (Options) Call

A covered call is an options strategy when you buy a stock and write (sell) a call against the shares that you now own.

Covered Call Formula to set stop loss:

Current Share Price - Premieum Received/Share = Stop loss/break even price

delta=The delta of an option describes its premium’s sensitivity to changes in the price of the underlying instrument.

beta=a measurement of relative volatility of a stock, made by compairing the degree of price movement to that of a larger index of stock prices

The Greeks = A Greek letter designates an option's sensitivity (below) to certain kinds of movements. Examples include Delta, Gamma, Theta, Vega, Rho and Alpha - all identified by the English language spelling of their respective Greek letters.

Delta=Delta is the amount an option's price will change for a corresponding one-point change in the price of the underlying security.

Gamma=Gmma The rate of change of the delta for a small change in the price of the underlying asset.

7 Day Theta=Theta the rate of change of the options value as time (1 day) passes with all else remaining the same.

Vega=Vega is the rate of change of the options value with respect to the 1% change in the volatility

Rho=Rho is the rate of change of the options value with respect to the 1% change in interest rate.

Vola %=Short for volitility %

Married Put

An option strategy whereby an investor, holding a long position in stock, PURCHASES a put on the same stock to protect against a depreciation in the stock's price. So you can sell your stock at XXX price no matter how low it goes. Married puts can provide a great means of limiting your losses and helping you learn the usefulness of puts in a portfolio. Married puts refer to the combination of two different purchases: that of a stock position and of a put option. Lets you sell XZY stock at strike price if it heads down in price. Purchase strike price few dollars under current price. This strategy establishes a floor, allowing unlimited profits while limiting the potential loss. In essence, this is like purchasing insurance against your stock. Your buying the contract so you get no primeum. It protects you and doesnt make you any money but could save your ass. With a stop limit you must sell when it hits that stop. With the put order you can decide to exercise or not.

OI = Open Interest - is the number of outstanding options of that type (Ford $10 Dec 05) which currently have not been closed out or exercised. Doesn't work with stocks. need options feed from eSignal for this.

Money Line = Line on options chain chart that shows where stock is currently trading at

In The Money = Expression used for any option series with intrinsic value--the option's strike (exercise) price and market price of the underlying security are such that the holder can exercise the option at a profit. For example, if a call option with a strike price of 30 and the underlying stock's market price is currently 33, the call is in the money. A put option is considered in the money when the underlying stock is selling below the strike price....

Expiration Date = The expiration date for all listed stock options in the U.S. is the third Friday of the expiration month (except when it falls on a holiday, in which case it is on Thursday).

At/On The Money option price = An option is at-the-money if the strike price of the option equals the market price of the underlying security.

In The Money option price = 1. For a call option, when the option's strike price is below the market price of the underlying asset.

2. For a put option, when the strike price is above the market price of the underlying asset.

Out Of Money option price = A call option is out-of-the-money if its exercise or strike price is above the current market price of the underlying security. A put option is out-of-the-money if its exercise or strike price is below the current market price of the underlying securi ty.

Naked Put = A put option whose writer does not have a short position in the stock on which he or she has written the put. Sometimes referred to as an "uncovered put."

Naked call writing is the technique of selling a call option without owning any stock. Being long a call means that you have bought the right to buy shares at a fixed price. On the other side of the transaction, the person who sold the call is said to be "short" the call, and his or her position can either be secured by shares (the covered call scenario) or unsecured (naked calls). A naked call position is much more risky than writing a simple covered call because you have essentially sold the right to something that you do not own.

Naked puts are very risky since the writer can lose big if the underlying asset moves opposite to the desired direction. But, profits are huge if the underlying asset moves in the right direction.

OCC = (Option Clearing Corporation)

Organization equally owned by the exchanges through which the various options exchanges clear their trades. Some of OCC's responsibilities are supervising the listing of options, issuing and guaranteeing option transactions, processing the money transactions, and the assignment of option exercises to writers. The OCC also issues an options prospectus that outlines

the rules and risks of trading options.

(options) spread = An options position established by purchasing one option and selling another option of the same class but of a different series. *n* all below!

vertical spread=Being long and short options on the same underlying asset with the same expiry date but with different strike prices.

covered put=if your short shares of stock you can buy them by writing covered put

The covered put is too limited to offer any true protection against the wrost-case outcome

Put sellers risk is limited because a stock can only fall so far

Selling puts can be a smart way to increase your current income while discounting your basis in a stock.

Selling puts in a rising market can produce profits when you are unwilling to tie up capital to buy 100 shares of an expensive stock.

collar=A strategy of stabilizing investment returns between an upper and lower range to make returns consistent with the investor's goals. Typically implemented by buying a put option and selling a call option on the same asset.

straddle=The simultaneous purchase/sale of both call and put options for the same share, exercise/strike price and expiry date.

bull spread=An option strategy wherein the investor profits when the underlying security's price rises. (vs. Bear Spread).

bear spread=An option strategy that makes its maximum profit when the underlying stock declines and has its maximum risk if the stock rises in price. The strategy can be implemented with either puts or calls. In either case, an option with a higher striking price is purchased and one with a lower striking price is sold, both options generally having the same expiration date.

box spread=An option position composed of four different contracts--a long call/short put with identical exercise prices and expiration dates, combined with a short call/long put with identical exercise prices and expiration dates.

credit spread=An option spread position whereby the premium of the option sold exceeds the premium of the option purchased--thus, creating a credit to the investor.

debit spread=An option spread in which the premium of the bought option is greater than the premium of the one sold.

calendar/horizontal spread=Options strategy--also known as a "calendar spread"--that includes buying and selling the same number of options contracts with the same exercise price, but with maturity dates that are different. The investor hopes to profit by price moves in the underlying security.

diagonal spread=An investment strategy that entails buying or selling of two different option positions of the same class (two call positions or two put positions in the same stock). Both the strike prices and the expiration dates of the options are different. For instance, a three month ABC call sold with a strike price of 30 and a two month call sold with a strike price of 25. Investors gain or lose as the difference in price narrows or widens.

butterfly spread=Complex option strategy that involves writing (selling) two calls and buying two calls on the same or different markets and several expiration dates. One of the call options has a higher strike price and the other has a lower strike price than the other two call options. If the underlying stock price remains stable, the investor profits from the premium income collected on the options that are written.

condor spread=An options strategy similar to a butterfly spread, except that the strike prices for short call and put are different.

long hedge=An option or futures contract that is bought to protect (think insurance) against an investment risk. For example, if interest rates are expected to decline, a call option will be bought to lock in a fixed income security's present yield.

short hedge= Used to eliminate or lessen the possible decline in value of ownership of an approximately equal amount of the cash financial instrument or physical commodity.

hedge notes=the risk is eliminated until the call expires. if purchase a put and the stock goes down the put value goes higher. you can sell it at a profit. this intrinsic value hedges your fall.

reverse hedge=an extension of long or short hedge in which more options are opened than the number needed to cover the stock position; this increases profit potential in the event of unfavorable movement in the market value of the underlying stock

variable hedge=a hedge involving a long position and a short position in related options. when one side contains a greater number of options than the other. the desired result is reduction of risks or potentially greater profits.

ratio write=when you dont cover all your shares. you have 50 and buy 1 call .. you are not covering the other 50

Physical Delivery/Cash Settlement=A transaction settled with a cash payment in the amount of profit or loss rather than the physical delivery of a commodity or other underlier. Examples include futures and options contracts for indices, which cannot be delivered.

Straddle = An options strategy with which the investor holds a position in both a call and put with the same strike price and expiration date.

Options Strageties:

Make sure to factor in all option costs when calculating profit!

(if you wish you can right click on a position in DirectPro and adjust the avg cost to reflect the put/call premium received)

[1] Try at your own risk. What if you sell/write 5 covered calls strike $40 thats in the money NOW for $6 per share premium. The stock is trading at $45.30 right now so they are obviously going to exercise the option. 5x6x$100 = $3000 (the premium you receive). You bought the stock at an avg price of $45.336 ($22668 total value). If you sell the shares to the contract holder your receiving $23,000 ($3000 premium + 20,000 for the shares at $40 each). This would mean you'd be green $332 (minus commissions of about $27). Whats to stop people from just doing that all day to make money. Unless im understanding this wrong. Works sometimes if current stock is above avg price. Plus there no gaurantee your going to get exercised. fricking CBOE

[2] JAY: Buy stragey, wait for some pullbacks on price and then consider writing covered calls to protect yourself *n*

[3] Buy a put on shares you own (called a married put) to protect against a depreciation in the stock's price. So you can sell your stock at XX price no matter how low it goes. Married puts can provide a great means of limiting your losses and helping you learn the usefulness of puts in a portfolio. Married puts refer to the combination of two different purchases: that of a stock position and of a put option. Lets you sell XZY stock at strike price if it heads down in price. Purchase strike price few dollars under current price. This strategy establishes a floor, allowing unlimited profits while limiting the potential loss. In essence, this is like purchasing insurance against your stock. Your buying the contract so you get no primeum. It protects you and doesnt make you any money but could save your ass. With a stop limit you must sell when it hits that stop. With the put order you can decide to exercise or not. As the stock goes down the put will increase in value thus off-setting the loss!

[4] Buy and sell calls and puts just to make premieum money on the stocks. If the premium on a $120 stock is only $5 you can control profit making opportunities you could not afford to buy previously. This gives you leverage. If you buy a put and the stock travels below the put strike price then you have made $$. Its like selling short without as much risk.

[5] Sell a call and buy a put on a long position. Protect against downs but offset price of put with premieum money from overed call.

[6] Buy a put instead of shorting stock in down markets (always there!) Your risk is limited to the premium only! If the stock goes below strike point then you make point per point money. If you short then the stock goes up, your risk is unlimited.

[6b] Insuring profits 2: If your short 100 shares of a stock at 50, buy a call for 55. Should the stock raise, so will the value of the call dollar for dollar offsetting your losses. If the stock declines you're short position will be profitable and you'll have to pay for the call but eh.

[7] Selling deep in the money costs can generate profitis for sellers who want to get rid of their stock anyway. It does limit profit to call striking price.

[8] Rolling up / Rolling Down - Cancelling out a contract and buying/selling another with a longer expiration date to avoid exercise

[9] Reverse Hedge - More options are poened then needed to cover the stock position; this increases profit potential in event of unfavorable movement in the market value of the underlying stock. ie: 3 calls are bought to protect 200 shares of stock would produce a ratio of 3 to 2.

[10] Variable Hedge - a hedge involving a long position and a short positon in related options when one side contains a greater number of options than the other. The desired result is reduction of risks or greater profits. ie: You buy 3 May 40 calls and sell one May 55 call. This variable hedge creates the potential for profits while completely eliminating the risk of selling an uncovered call. If underlying stocks market value were to increase above $55/share your three long positions would increase in value by 3 points for every point in the short (sold) position. If stocks value falls the short position will lose value and could be bought back/closed at a profit.

[11] Repair http://www.cboe.com/Strategies/EquityOptions/StockRepairs/Part1.aspx Dont like this one

[12] Page 198 in Options book has many put selling strageties however account can not do this now so copy in later

[99] There are tons of complex multi join strageties you can think of with options. Be creative but safe & remember to follow your rules. If your bailing at $2 rise, dont wait until $3.

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######### Ral's Methods & Glossary (end): - 0.7

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Recent Ral Notes (updated 6/16//06):

The Russell 2000 is an unmanaged index of the stocks of 2000 small and mid-cap companies. It assumes the reinvestment of dividends and capital gains and excludes management fees and expenses. One cannot invest directly in an index.

-All posts are for 13-m time frame (30-min in GBP) unless otherwise noted

-Rule of Three - rule that states things are governed by 3.. plan act review.. mother father child.. trinity.. ETS.. etc

Ral uses 3 types of methods:

<ral> the first type I will call "simple" and I'll focus on these today

<ral> the secoind type I will call "complex" and I'll focus on these tomorrow

<ral> the third type I will call "esoteric" and will describe some of these very briefly tomorrow

- the trigger in a fops pattern is always the low of the third candle (a tick below is the entry)

- the trigger in a tops pattern is always the high of the third candle (a tick above is the entry)

Coba uses MSL and MSH, ORM and 3 per

The ordinal triggers usually use the 30 minute time periods

WSCP - Winter Solstice Critical Price - The WSCP is the close of all markets on 12/21/05. The SECP (Spring Equinox Critical Price) is the close on 3/20/06. During the active period for the WSCP, look for short trades (daily time frame) when the market is below the WSCP, and longs when above.

For example, the WSCP for GOOG is 426.33. The low in GOOG is at 331.55.

The Russell WSCP is 688.80. The high is at 751.70

LWVS - Larry Williams Volatility Signal - Foruma is (5 day TR *.85) where tr=true range. To find true range: On each day you will record the open, high, low and close....again for any index, stock, commodity, whatever. If there is a gap price one would calculate true range from the closing price to the gap price.. but generally indexes dont have gaps. Larry Williams has never said where he got that .85 from...

maxgain - is the maximum gain produced by the signal to date (now).. how much of that you obtain from using the methods will be less.. but should get atleast 62% of maxgain if using the methods properly.

3 Per Short/Long Triggers (3-per) 3pb

ref: http://www.undergroundtrader.com/archives/index.cgi?channel=Seminars&month=01&day=24&year=2005

Steps (or pick any 3 candles in a row in any time frame)

1 yesterdays low from last candle 1167.50

2 todadys first candle high 1173.40

3 today second candle range 1169.50-1172.80 (kinda like ACD)

Find the high and low points in that set of three candles.

So those values are 1167.50-1173.40

:If the market goes below 1167.50 then the trend is SHORT

:If the market goes above 1173.40 then the trend is LONG

Now, if we do get a trigger then the trend becomes "rolling". the method becomes based on the sequence of each three candles starting at the triggering candle. When this candle period ends, there will be a new set of triggers

Uses: Can be used all by itself. For stops. Trade Decisions.

Ex. It can be useful to require that 3-set go in the direction of your trade before you pull the tirgger

Targets

Waves (use wave calc)

When a market structures a wave form

we can use the information from that wave to calculate the estimated growth points

we use the information from Wave 1 to calculate the target for Wave 3 and for Wave 5

Range

A range or "limit" target is genearlly set by the upper and lower EBB and 13-S values

Ex: If the 13-S is above the market when there is a longside entryit automatically becomes a nominal (exact) target

a close over 13-S next target would be upper EBB

Gann Angles (natural square targets)

Ordinal

With any trend determining method there will be an indication of how many new highs (or new lows) have been set in the trend (new highs, closes etc). Anything that is "countable"/orderly. Ordinals are simply the number series 1,2,3,4,5,6,7.....n But we treat this number series in a special way by definine Fibonacci Ordinals: so these would be 3 - 5 -8 - 13 - 21 -34 ,etc.

The count of ordinals always begins with the first period that reverses trend

Re-entry on ordinal: The most genearl rule is to re-entry on the "4th" new high (in a long trend) or 4th new low (in a short trend)

When a trend reverses from short to long, that's ordinal 1 (period is usually 13m)

a new high in a subsequent period is ordinal 2

a new high in a subsenqeut period is ordinal 3

The oridinal rule is that gains are takne in the 3rd, 5th, 8th, 13 degrees of trend. Gain taking ordinals! (fibonacci)

Misc

. Daily GBP Report - Daily provides daily signals. Doesnt mean use on daily chart. These can be used with intra-session methods.

. Ralo24 is the current version of Ral-O-Matic (requires RealTIK). But you can use playback saved ralo files for training.

. When ral makes a forex call such as "GBP going long" The /USD is assumed. Ex: GBP/USD unless otherwise noted

Standard pairs (ral also usess) are GBP/USD and USD/CHF

These are due to standard internet bank relation ships.

. RAL: Compounding gains are powerful. Dont just take it all out.

. RAL: Managed mutual funds are dicking. Fees reduce gains tons over the years

. RAL: Calls the up/down triangles WAVES

. RAL: After 3 5 8 or 13 new lowes (or highs) be particularly aware of the trend chage.

. RAL: Think of trend stages as immature, mature and old (stale?? hehe)

. RAL: Try my charting pattern demo http://www.ralomatic.com/ - eh why not

. RAL: If your having dicipline problems. Make audio files that play at random. "Follow the method" "What is your stop" "Whats your target" "Did you put it in the journal"

. RAL: Middle/impulse wave failure is uncommon. The 3 wave types are anticipatory-impluse-limit p257. Times reference low times 1.618 and add to that price to get estimated next wave.

FOPS refers to Fall Off Pattern Signal. (RAL) Day/Swing Setup It is nominally a bearish pattern. It is

defined as any sequence of three periods (any time frame) where the pattern of highs is a

market structure high, that is, high, higher high, lower high Additionally, the close of the

third period must be lower than the lows of the first two periods. Trade entry on the short

side occurs in the next period if the “trigger” is exceeded by a tick. The trigger is the low

of the third candle. The nominal initial stop on this pattern is a tick above the market

structure high (the “higher high” in the pattern). The trading stop and initial target are

frequently determined by the context. Via Ral/Underground trader PDF Exmple can be found in chart images directory.*n*

Glossary of ral’s Technical Terms

13-Shift (13-S) - the 13 period exponential moving average projected 3 periods into the future.

The LONG signal is when the 13-shift rises above the 34 period MA (short, below)

13-ORM refers to the first 13-minute period of the session consdiered as an opening range. The high and low of this initial period are then long or short triggers going forward. (like ACD) So 9:30 to 10:43

3pb three-price break trend. 3pb is an old Japanese charting method. Same thing as 3 per short/long trigger method above

3per three-period rolling range trend (either short or long--see above section on 3 pers)

[12:55] <ral> look at the highest and lowest values in the three prior candles to where u are you wil see that this "range" is

[12:56] <ral> If it goes lower then that range-- we refer to this break and its low as the first ordinal low

[12:56] <ral> because it is the first "new" low in this down trend . now when this period completes a new one begins

and the high-low range of the last three candles will "roll" forward one period . hence 3pb rolling method

3-set A method for developing opening range triggers

AC Additive candle

BBR Bull/Bear Reserve

BC bozu controller (the body midpoint of the ruling bozu above or below the market)

BMP Body mid-point (the midpoint between the open and close of a period)

BP Breakprice…the price (typically a close) that breaks (reverses) the prevailing trend

BW body weight

CF carry forward 3pb - basically uses last candle from day before as first candle in 3pb calculation. not good for gap ups/down opens.

CG Center of gravity: based on equal weighting of candle points (open, high, low, close)

CON continuous 3pb method

CL - Close

CP Cacdle pattern

CPZ Critical price zone … derived from the scissors method

CTR current trading range as defined by most recently formed market structures

DSS downside structure (dss is a downside structure interior to a prevailing USS)

DTR daily trading range as defined by complete market structures

EBB Extreme Bollinger Band (13 periods ema and 2.618 standard deviation envelopes)

EOB end of box

EOBV end of box volatility

EOR refers to eighth of range used in setting targets, stops and gaintaking points

FOPS Fall off pattern signal. .” It is a bearish pattern pattern consisting of three consecutive candles (any time period, any market) with the following characteristics: (a) the three candles must be a market structure high (a high, higher high, and a lower high), and (b) the close of the third candle must be lower than the low of the two prior candles. This pattern is shown in the third figure. The candle bodies may be of any type. EX:

FS fresh start 3pb method. 1st price is todays OPEN and the first close is the CLOSE of the frist period (whatever you choose as your trading period). ie: First 1 min candle. First 3min candle. First 13 min candle. Like ACD but using one candle or whatever time frame u want really

GA Gann Angle - Natural square of 8th range used for targets

GMP Globex mid-point

LTS Long term stop

LWWB Larry Williams' Weekly Buy signal

LWWS Larry Williams' Weekly Sell signal

msh market structure high (wicks count)

msl market structure low(wicks count)

MTR major trading range in the past 89 sessions (which is a fib #)

NC Non-confirmation

NH new high

NL new low

NS Natural Square

NS8 Natural Square price line at every 8th of current Natural Square range

Nullification Price has violated a structural price point; a major reversal signature

OF open filter 3pb

ORM opening range method (like ACD) (“to orm” means to use the ranges of reference as triggers). Use this metohd to clip or take 1 point from each trigger. (same dang as 3 per triggers) The ORM is based on whatever can be taken as an "opening period." As used in ralroom, the ORMs posted usually refer to the high and low of the first trading period (from 9:30 to 11:01). This ORM is then used for long and short triggers in the third trading period (2:03-4:00). Ex:

[11:06] <Bot> Ral (#ralroom): 2 here are the orms for the 3rd period

[11:06] <Bot> Ral (#ralroom): 2 GOOG: 350.80-358.53

[11:07] <Bot> Ral (#ralroom): 2 Naz100: 1664.50-1673.50

[11:07] <Bot> Ral (#ralroom): 2 Russell 722.10-727.30 (symbol for Russell is AB ##)

ORDINAL Trigger - With any trend determining method there will be an indication of how many new highs (or new lows) have been set in the trend (new highs, closes etc). Anything that is "countable"/orderly. Ordinals are simply the number series 1,2,3,4,5,6,7.....n But we treat this number series in a special way by definine Fibonacci Ordinals: so these would be 3 - 5 -8 - 13 - 21 -34 ,etc.

The count of ordinals always begins with the first period that reverses trend

PT Pricetime

PTB pricetime box

PTBox Refers to the 34-period during which waves (bullish or bearish) form and grow

R:R Reward:Risk estimate for any trade. Desireable trades are R:R > 2.00

RMP Range mid-point (the mid-point between high and low of aperiod)

Scissors A method for projecting future prices based on two defined periods

Showdown candle - Candle that is a mkt structure high and low. http://www.undergroundtrader.com/training/ral/2002-9-20-11-36-35.gif

Slingshot A rapid reversal of trend following price hitting the upper or lower EBB

SS “slingshot” move from EBB

T target

TOPS Take off pattern signal…a bullish candle pattern. It is a bullish pattern consisting of three consecutive candles (any time period, any market) with the following characteristics: (a) the three candles must be a market structure low (a low, lower low, higher low), and (b) the close of the third candle must be higher than the high of the two prior candles. See RAL2.DOC in UT directory under Mulah. Ex:

TR trigger

TRW trend weight

TSW Total Scissors Weight derived from the scissors method

USS upside structure (uss is an upside structure interior to a prevailing DSS)

V/C void of course moon

V/C Void of course:refers to the moon's period without aspect prior to entering next sign

VOS Void of Structure (post 34-period end of box before fully formed structure occurs)

WSCP - Winter Solstice Critical Price

VR volatility reversal

X An important "center of gravity" type projection derived from the scissors

C=current trading range

MTR=major trading range (green good)

CTR=current trading range (green good)

V/C refers to "void of course" which means that the moon is between signs

W1 W2 W3 W4 W5 - Waves

Notes from candle stick seminar

========================

- YIN-female YANG-male candle

- Two dojis in a row (or additative) = stronger reversal

- Candle patterns of two or more candle relationships are "stronger" signals tha individual candle patterns

thus a dark cloud cover (2 candle relatioship) is stronger than a gravestone doji (1 candle pattern) and an evening star (3 candle relartioship) is stornger yet

AC/Additative candle = an dadditiev candle is a candle that is formed across periods as long as the candle pattern is the same type. Ex: 3 heavy down candles in a row

RMP Range mid-point (the mid-point between high and low of aperiod)

BMP Body mid-point (the midpoint between the open and close of a period)

In a hammer for example the BMP is considerly higher then the RMP, thus its a bullish candle

BOZO = A very big candle. Long body, not many wicks

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######### Terms and Definitions: - 0.6

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(*n* = New within the last month or so)

250'S= *new* stock prices in increments of 2.5, these levels act as support and resistance 2.40, 2.50 and 2.60 levels (eg: 47.40, 47.50 and 47.60, also 22.40, 22.50 , 22.60) options are priced in 2.50 increments up to $50 and this acts as a magnet

3-Day Rule: 3-day clear rule from SEC/cash accounts/retirement must be cash/3 days for transactions to clear so you cant re-use that money.

3.5 Strike reversal (after uptrend ex) Strike1-5 Period stops making progress and stalls/peak. Strike2-15 Period stops making progress/5 tightens towards 15. Strike2.5-is fades a noodles stochastics bounce Strike 3.5-Retracement coils back and forms a mini inv pup casuing a breakdown and reversing the trend. Reverse for downtrend reversal

http://www.undergroundtrader.com/training/jays_methods2/sld017.html

darnIT all this is be a noodles fade move we been jumping in on! Ie: Stock sell fades the noodles and finally burst out with the noodles take a pop or mini pup

10Q = Quarterly Report of corporate performance filed with the SEC by a public company for the first three quarters of its fiscal year. Required by law.

ADX or sometimes Relative Strength: (p187) Average Directional Movement Index study system developed by J. Welles Wilder, Unlike most oscillators, ADX does not attempt to gauge the direction of the trend; instead, it works to gauge the strength of the trend. ADX operates on a configurable scale of 0 to 100; the higher the oscillator, the stronger the trend (over 30 usually). Each line measures the current periods "todays" range compared to yesterdays. See chart configuration under day trading notes.

aBuy when the +DI - - - - - - rises above the -DI and ADX line is above 30

aSell when the +DI crosses down and heads below the -DI (solid line) and ADX line is above 30

aWhen ADX is below 30 and both DI signals weave around jumbled then the market is too trendless to trade

ADX Line or sometimes Relative Strength line (direct pro): (p190) the ADX line is based on the spread/difference between the +DI and -DI lines from that same system. Most indications UP means buy DOWN means sell, not this time, when the line is above or below 30 you'll see an uptrend or downstrend. ADX line is more of a volume indicator. Use it in conjunction with + - DI lines. The downside of using the +DI and -DI without a smoothing line is that you'll likely receive too many signals. Usually dont buy if ADX line is below 30 See chart configuration under day trading notes.

AON: All or none instructs broker to fill all or none at all! (see IOC)

ASK/OFFER PRICE=(SELLERS) refers to the lowest price at which market maker (behalf of person) will sell a specified number of shares of a stock at any given time. Ask price is normally higher then bid price

*Always try to buy on the BID and sell on the ASK. Not the reverse way around! ( harder for high vol stocks)

Ask/Offered shares is your specialist set buying price, bid is selling price your being offered that is negotiable for your shares. NYSE rules & nasdaq differ. More asks on level II or any quote screen means selling/lower prices!

Ask - Price requested by the seller.

ATR = Average True Range study: Measures a security's volatility. ATR does not provide an indication of price direction or duration, simply the degree of price movement or volatility. High ATR values indicate high volatility and may be an indication of panic selling or panic buying. Low ATR readings indicate sideways movement by the stock. Good to see if stock has large moves. Who wants to play a shallow non volitle stock? At the same time who wants to play one that wiggles TOO much (goog etc) See chart configuration under day trading notes.

If a stock has an atr of 4 and its moved 3.75 up then dont be looking at a long

Arbitrage: *n* Technique of buying and selling same securities to take advantage of small differences in price.

Basket Stock = *n* Familiar stock you trade regularly. 3 Million Avg Volume or more. Familiarity breeds confidence. See Watch board in direct pro

Blanket = Lots of prints at the same price level on the TOS

Door Knob = Confusion/Up and down prints around the same level 1107 1108 1107 1108 1107 1108 (chop)

Ben S. Bernanke = Federal Reserve Board Chairman

BID PRICE (BUYERS) refers to the highest price a market maker (behalf of person) will pay to purchase the stock.

Buyers and sellers set price of a stock. Selling usually triggers lower price (usually!)

Bid price is normally lower then ask price unless markets are crossed

*Always try to buy on the BID and sell on the ASK. Not the reverse way around! ( harder for high vol stocks)

Ask/Offered shares is your specialist set buying price, bid is selling price your being offered that is negotiable for your shares. NYSE rules & nasdaq differ. More bids on level II or any quote screen means buying/higher demand/prices..

Bid/Ask Spread=Spread is x100 (6x5) means there are 600 bids to buy and 500 shares for sale at ask price

Large flucuations in bid and ask volume can be cules to whos buying and what will happen next. There are more people who want to buy the stock then sell it! Thats good for long positions.

Bear Market-Poor/Declining, Sellers causing decline in price

Bottom Up Investing=An investment approach that de-emphasizes the significance of economic and market cycles. This approach focuses on the analysis of individual stocks. In bottom-up investing, therefore, the investor focuses his or her attention on a specific company rather than on the industry in which that company operates or on the economy as a whole.

See TOP DOWN investing

Bollinger Bands = *n* Developed by John Bollinger, Bollinger Bands are similar to moving average envelopes. The bands are plotted at two standard deviations above and below a 20-day moving average. As a rule, prices are considered overbought when they touch the upper band. They are considered oversold when they touch the lower band. Using two standard deviations ensures that 95% of the price data will fall between the two trading bands. Study. See chart configuration under day trading notes. UT uses. Bollinger bands are not support levels. they are exhaustion levels

BBS is the bollinger bands with 20 period with 2 standard deviations. *n* which is the standard in direct pro anyway

bond=A certificate which is evidence of a debt on which the issuer promises to pay the holder a specified amount of interest for a specified length of time, and to repay the loan on its maturity. Strictly speaking, assets are pledged as security for the loan, except in the case of government bonds, but the term is often loosely used to describe any debt issue. Bonds are issued by corporations and by federal, provincial and municipal governments. ... *n*

For example, say you buy a bond with a face value of $1,000, a coupon of 8%, and a maturity of 10 years. This means you'll receive a total of $80 ($1,000*8%) of interest per year for the next 10 years. Actually, because most bonds pay interest semi-annually, you'll receive two payments of $40 a year for 10 years. When the bond matures after a decade, you'll get your $1,000 back.

In the case of bankruptcy, a bondholder will get paid before a shareholder because you are a creditor.

However, the factor that influences a bond more than any other is the level of prevailing interest rates in the economy. When interest rates rise, the prices of bonds in the market fall, thereby raising the yield of the older bonds and bringing them into line with newer bonds being issued with higher coupons. When interest rates fall, the prices of bonds in the market rise, thereby lowering the yield of the older bonds and bringing them into line with newer bonds being issued with lower coupons.

Bills - debt securities maturing in less than one year.

Notes - debt securities maturing in one to 10 years.

Bonds - debt securities maturing in more than 10 years.

bozu candle = long shadows, back to back hammers, MM tricks . bozu means very big candle

breadth = Indicators that measure market flow such as $TICK and $TRIN.. as in dragon-breath!

Bullish market-Agressive/Good, Buyers driving price higher

BUYFADE=*n* the noodles move down and stock moves up (see SELLFADE opposite)

CANSLIM=Curr.Earnings Ann.Earnings NewProduct? Supply&Demand LeaderorLaggard? Institutional sponsorship The market indexes. For more long term investing. IBD Coined *n*

CRANK = to move with a winding course : ZIGZAG, reverse *n*

CCI=Commodity Channel Index study, a timing system that is best applied to commodity contracts which have cyclical or seasonal tendencies. CCI does not determine the length of cycles - it is designed to detect when such cycles begin and end through the use of a statistical analysis which incorporates a moving average and a divisor reflecting both the possible and actual trading ranges. Although developed primarily for commodities broker, the CCI could conceivably be used to analyze stocks as well. See chart configuration under day trading notes.

0 Line = Major support and resistance. Pay attention at crosses.

A trend is defined as 5 or more bars (depending on your time frame chart) above or below ZL (zero line)

Woodie CCI settings: 14 Normal, 6 Turbo! (TCCI)

Exit rules for CCI: Flat line, A trend line break, CCI Crossing Zero Line, Hooking to extremes, CCI not moving, Profit reached or equal to hard stop when it slows, When other indicators disagree with the trade

CD=Certificate of Deposite

Channels: *n* TIGHT CHANNELS: this refers to the moving averages charts, as the 5 and 15 period simple moving averages indicated the trend channel. rule of thumb, when the space between the 5/15 period is less than .15 then it is a TIGHT RANGE--- this usually is light volume and should not be overtraded as there are many headfakes and wiggles

Consolidation/Tight Channel -> Break/Wide Channel -> Peak/Exhaustion -> Reversal/Tight Channel

By channels we mean bands or MA lines forming channels around the prices.

CHOP = chop means no direction just random pops and drops as the moving averages are tight

coefficient = A constant that multiplies a variable.

CONFIDENCE Index = A confidence indicator calculated by dividing the average yield on high-grade bonds by the average yield on intermediate-grade bonds. The discrepancy between the yields is indicative of investor confidence. Started by Barrons

conglomerate = Made up of parts from various sources or of various kinds.

coupon = The interest rate stated on a bond when it's issued. The coupon is typically paid semiannually.

This is also referred to as the "coupon rate" or "coupon percent rate".

Investopedia Says... For example, a $1,000 bond with a coupon of 7% will pay you $70 a year. *n*

DIA = Shares in a trust representing all 30 stocks in the Dow Jones Industrial Average. Diamonds trade on the American Stock Exchange. 'Diamonds trust' Mirrors YM futures

DAX = The most widely used German index. More on indices $DAXI

debt ratio=A ratio that indicates what proportion of debt a company has relative to its assets. It is calculated by dividing total debts by total assets.*n*

derivatives=Instruments, such as options and futures contracts, which derive their value from the value of an underlying security, group of securities or an index

dividend = Payments made by a corporation to its shareholders (distribution of earnings). The amount you'll receive is based on the number of shares you own.

dividend yeild=An indication of the income generated by a share of stock. Dividend yield is calculated as annual dividends per share divided by price per share.*n*

doji = a candle covering a large price range, but starting and ending at the same price. + Comes after a series of uptrend or downtrend candles and reverses trend. *n*

EBB = Ral has modified John Bolilnger's regular Bollinger bands to conform to the Fibonacci methematics of the methods so instead of 2.0 standard deviations, we use the Fibonacci growth constant of 2.618 and instead of the 20 periods we use the 13 EMA periods which are the standard periods for our Fibonacci based system this creates what I call Extreme Bollinger Bands

Esig source: (H+L)/2 seem to work on

ETF = Exchange-Traded Fund. A basket of stocks that is bought and sold on a stock exchange as if it were a single stock. the QQQQ's are an example of this (formally QQQ on the amex exchange.See "Symbol Guide - Rush Trade Indicies & ETFs.XLS for top ETFS

Fibonacci=(p192) Mathimatician who invented number sequencing. Appear to be for more longer terms. it finds the support and resistance points on a stock, index, or commodity chart. Fibonacci retractment levels act as support and resistance levels. "Fibs". Levels are gauged at 38.2%, 50% and 61.8% Draw an uptrend or downtrend connecting a major peak and trough, activate your charting software Fibonacci option. We use "fib lines" as possibile support & resistance. Use to strengthen your buy and sell decisions but not as definate signals. Tip: Trades uses fib lines to measure support and resistance areas in gaps. One method: stretch the lines from closing price of gap toopening price. You can gauge potential support/resistance as traders try to close the gap. Self fulfilling prophecy. Studies on charts:

Example of fib series: 1 3 5 8 13 21 34 55 89 144 233 377

HOWTO USE FIB TOOLS: # Videos directory under mulah

# http://www.undergroundtrader.com/archives/index.cgi?channel=Seminars&month=02&day=21&year=2001

Arcs: Fibonacci Arcs are displayed by first drawing a trend line between two extreme points, for example, a trough and opposing peak. Three arcs are then drawn, centered on the second extreme point, so they intersect the trend line at the Fibonacci levels of 38.2%, 50.0%, and 61.8%. The interpretation of Fibonacci Arcs involves anticipating support and resistance as prices approach the arcs. Draw arc line from left to right, bottom up or top down. Appear to be for more longer terms. (gif in images directory)

Fans: Fibonacci Fan Lines are displayed by drawing a trend line between two extreme points, for example, a trough and opposing peak. Then an "invisible" vertical line is drawn through the second extreme point. Three trend lines are then drawn from the first extreme point so they pass through the invisible vertical line at the Fibonacci levels of 38.2%, 50.0%, and 61.8%.. (This technique is similar to Speed Resistance Lines.) The following chart of Texaco shows how prices found support at the Fan Lines. Appear to be for more longer terms. (gif in images directory)

Retractment Points: Fibonacci Retracements are displayed by first drawing a trend line between two extreme points of the last trend (not current trend), for example, a trough and opposing peak. A series of nine horizontal lines are drawn intersecting the trend line at the Fibonacci levels of 0.0%, 23.6%, 38.2%, 50%, 61.8%, 100%, 161.8%, 261.8%, and 423.6%. (Some of the lines will probably not be visible because they will be off the scale.)

After a significant price move (either up or down), prices will often retrace a significant portion (if not all) of the original move. As prices retrace, support and resistance levels often occur at or near the Fibonacci Retracement levels. Look at CTC video labeled fibs in mulah. In the following chart of Eastman Kodak, Fibonacci Retracement lines were drawn between a major trough and peak.

You can see (gif in images directory) that support and resistance occurred near the Fibonacci levels of 23 and 38%. Appear to be for more longer terms.

Time Zones: Fibonacci Time Zones are a series of vertical lines. They are spaced at the Fibonacci intervals of 1, 2, 3, 5, 8, 13, 21, 34, etc. The interpretation of Fibonacci Time Zones involves looking for significant changes in price near the vertical lines.

In the following example, Fibonacci Time Zones were drawn on the Dow Jones Industrials beginning at the market bottom in 1970.

You can see that significant changes (gif in images directory) in the Industrials occurred on or near the Time Zone lines. Appear to be for more longer terms.

More at http://www.borsanaliz.com/eng/fibonacci.htm

Float: *n* In securities, the number of outstanding shares in a corporation available for trading by the public.

Thin Float: When only a small number of shares of a common stock are still available on the market thus its easier to move the price of a stock. like trying to blow a few sheets of paper around as opposed to trying to blow a book around (thick float)

THICK: Many shares of a company available for trade

FOPS = refers to Fall Off Pattern Signal. It is nominally a bearish pattern. *n* see it under day trade setups for more

Foregone Earnings = For example, if fund XYZ has a 5% sales charge (front-end load) and you invest $10,000, then your net investment would be $9,500. In other words, $500 was not invested.

If the fund earned 10% return, and you held the shares for 1 year, then you did not receive $50 (.10 x 500) in earnings. The $50 is the money you did not earn because your $500 was not invested.

Forex: An over the counter market where buyers and sellers conduct exchange of foreign and domestic curriences

Futures: Contracts to buy or sell specific quantities of a commodity (pork bellies!) or financial instrument at a specified price with delivery set at a specified time in the future. No uptick rule. Futures are Grains, meat, energy etc... See OPTIONS for stock.. Futures close at 4:15pm EST and reopen at 4:45pm EST.

-Watch tick, trin and all that stuff when trading futures.

Links: nfa.futures.org, www.cme.com (find broker)

Symbols: NQ - Nasdaq $20 per point

ES - S&P 500 $50 per point

YM - Mini Dow $5 per point but its volitale!

YM sometimes used for gap fading if gap > 10 pts

See list in Research & Lists Dir for symbols

E-Minis: are small affordble versions of futures! Contract Month codes: March-H, June-M, Sept-U, Dec-Z

Dont hold them overnight. Big price flucation. No uptick rule on futures/emini. They also have tax advantages.

See nfa.futures.org, cme.com, cbot.com for more on futures/emini futures.

ECN:

ECN is an acronym for Electronic Communication Network. ECN's allow customers to bypass the middlemen (market makers) that have traditionally executed customer orders. ECNs receive orders that are either executed against other orders within the ECN's order book or displayed within the order book.

SuperDOT=NYSE/AMEX, SOES & ISLAND=NASDAQ

EMA = An exponentially smoothed moving average () gives greater weight to the more recent data, in an attempt to reduce the lag. Unlike the SMA that gives equal weight to all prices, the exponential average gives more weight to the most recent currency prices. The purpose of the exponential weight is to give more importance to the most recent data in the determination of trend direction. Raghee Horner swears by the 34 EMA that she calls 'the wave'

EPS=Earnings per share (EPS)

A company's profit divided by its number of outstanding shares. If a company earning $2 million in one year had $2 million shares of stock outstanding, its EPS would be $1 per share. In calculating EPS, the company often uses a weighted average of shares outstanding over the reporting term. I like $1.00 or higher. Higher = better

Fundamental analysis=is a method used to evaluate the worth of a security by studying the financial data of the issuer. It scrutinizes the issuer's income and expenses, assets and liabilities, management, and position in its industry. In other words, it focuses on the "basics" of the business.

George Soros = Philanthropist & wealthy investor who takes a large amount of politcal stances

guidance - In financial reporting, guidance is a publicly traded corporation's official prediction of its own near-future profit or loss, stated as an amount of money per share. Guidance is usually given in a quarterly report to forecast the corporation's performance in the next quarter. Guidance is an aid to financial analysts and the stock market in valuing the corporation, and helps prevent overvaluation. *n*

GTC = Good Till Close (originally good til cancelled) trades use this order then move their stop when it is near

Heikin-Ashi = A type of candlestick chart that shares many characteristics with standard candlestick charts, but differs because of the values used to create each bar. Instead of using the open-high-low-close (OHLC) bars like standard candlestick charts, the Heikin-Ashi technique uses a modified formula:

Close = (Open+High+Low+Close)/4

Open = [Open (previous bar) + Close (previous bar)]/2

High = Max (High,Open,Close)

Low = Min (Low,Open, Close)

headfake = When a market maker attempts to place bids and offers in such a way as to make other traders think a stock is moving in a direction that it really isn't. *n*

HEDGE/HEDGING = Hedge is an investment that is taken out specifically to reduce or cancel out the risk in another investment. The term is a shortened form of "hedging your bets", a gambling term. A lot of EFT's are used for hedging

In options=a stragey involving the use of one open position to protect another. Eh same.

hedge fund=A private investment fund or pool that trades and invests in various assets such as securities, commodities, currency, and derivatives on behalf of its clients, typically wealthy individuals. Some Commodity Pool Operators operate hedge funds.

history - financial report of the past duh.. *n*

indemnify=secure against hurt loss or damage as in an imdemnification agreement in a corporation

IBD = Investors Business Daily, Print and web publication for the research of stocks.

Check articles: Big picture, Top 10 News Storis, Use my stock lists

Charts of stocks with a highlighted border may be near a potential buy point. Please note that the chart analyses will not be buy or sell recommendations.

implied volatility = The volatility of a futures contract, security, or other instrument as implied by the prices of an option on that instrument, calculated using an options pricing model.

IOC = Immeidate or Cancel. An order requiring that all or part of the order be executed immediately after it has been brought to the market. Any portions not executed immediately are automatically cancelled. IOC orders are available on the Order Entry Bar (Market Depth Window) under “TIF” at the very bottom. Route must be set to DART. *n*

ISM Services = Institute of Supply Management. There are two main indexs: Manufacturing & Services. They are monthly gauge of business activity based principally on the purcahse of supplies for use in manufacturing and for usein services as well as measuring various features such as prices, wages etc. Theya re a moderact impact report typically. The FED uses ISM as one of its inflation indexs.

IRA = A type of Individual Retirement Annuity in which contributions are made with after-tax (nondeductible) dollars. If certain requirements are met, earnings accumulate tax-free, and no federal income tax is levied when qualifying distributions are taken from the plan.

ROTH IRA = A type of Individual Retirement Annuity in which contributions are made with after-tax (nondeductible) dollars. If certain requirements

are met, earnings accumulate tax-free, and no federal income tax is levied when qualifying distributions are

Intraday=Within the current day

January Effect=An general increase in stock prices during the month of January.

Joseph Granville = Wrote many books on technical analsys and made a lot of money investing. B&N guy recomended "the book of granville"

Larry Kudlow = (born August 19, 1947), nicknamed Larry, is an American conservative, supply-side economic commentator. He currently hosts the TV program Kudlow & Company on CNBC. Kudlow is also the economics editor for National Review (a political magazine) and its online complement, the National Review Online.

left-wing = The above term describes a political party or one of its members who advocates social change. A left-wing party will normally advocate greater public ownership of the means of production and an extensive system of social security.

Level I Quote: = Inside bid/ask/size/price/range

Level II Quote Screen/Market Depth: = Shows you depth, how many shares at each level. Auto updates. Its the dang! Demand! Etc. Use this screen wisely.

Price action: Moving clockwise=bearish, counterclockwise=bullish. Bid/Asks under the top position are considered 'away' or 'out of market'

Up and down arrows on book indicate bid/offer changes from original order placed by firm.

8x30, 800 shares need buying a nd 3000 selling/offered. This is pretty week. The nXn are only the inside offers on the chart or the upper most color.

Selling signs on level II screen:

-Large blocks on offer/ask

-Bunch of down arrows on BID

-High ratio bid/offer. Ie 2x45

-Lots of tickdowns

-Watch large market makers (TMBR, PSE etc..)

See TICKER & NBBO......

liquid = A security is liquid if it can be converted into cash at any time at a low cost. Usually applies to short-term marketable securities and very short-term nonmarketable instruments

Limit order:

An order to buy a stock at or below a specified price or to sell a stock at or above a

specified price. For instance, you could tell a broker ``Buy me 100 shares of XYZ Corp at

$8 or less'' or to ``sell 100 shares of XYZ at $10 or better.'' The customer specifies a price

and the order can be executed only if the market reaches or betters that price. A conditional

trading order designed to avoid the danger of adverse unexpected price changes.

Listed stock: NYSE stock (in jays usage)

Market capitalization: The total market value of a company or stock. Market capitalization is calculated by multiplying the number of shares by the current market price of the shares.

Market Maker: See specialist, LMM=Lead Market Maker

NAV = The value of a collective investment fund based on the market price of securities held in its portfolio. Units in open ended funds are valued using this measure. Closed ended investment trusts have a net asset value but have a separate market value. NAV per share is calculated by dividing this figure by the number of ordinary shares. Investments trusts can trade at net asset value or their price can be at a premium or discount to NAV.

NASDAQ = Trade market mostly using ECN's, NASDAQ symbols are all 4 letter, NYSE & AMEX and 3 letter

NBBO = National Best Bid or Offer. NBBO is the bid and ask the average person will see. Day traders usually use Level 2 market maker screens to see ALL the bids and offers for a particular stock. The NBBO is updated throughout the day to show the highest and lowest offers for a security in all exchanges and market makers

NADOOS = Nasdaq 100 Futures

NOODLES = Nasdaq 100 Eminis futures contracts (ticker changes with contract)

Ral# the Nasdaq composite encompass many sectors, while the Naz100 index and futures is primarily the largest non-financial technology stocks of teh Nasdaq *n*

NQ's= NASDAQ 100 Eminis Futures

OCO = One cancels other order. OCO orders are available through Trade Strategies. When one criteria is met, the other order is canceled. ahhh! *n*

OBV=On Balance Volume study, Sum of volume used to quantify buying or selling pressure to either confirm the current price trend or warn of a possible reversal

otcbb.com = Penny stocks (over the counter)

oscillators = The general term for a device that generates alternating patters. (MACD, ADX)

LEANDOWN/LEANS = UT--the opposite of a short squeeze, you get continued selling under the 20 band stochastics climaxing in a panic "look to lock in leans" *n*

linear regression = lsma (linear squares moving average)

metrics = Methods that a company has come up with to measure something, like effectiveness of a training program

Moving Average MA/SMA=An average of data for a certain number of time periods. It "moves" because for each calculation, we use the latest x number of time periods' data. By definition, a moving average lags the market. An exponentially smoothed moving average (EMA) gives greater weight to the more recent data, in an attempt to reduce the lag. See ChartSchool article on Moving Averages.

http://www.stockcharts.com/education/IndicatorAnalysis/indic_movingAvg.html

* AVOID entering a long trade when the 200 day moving average slopes down over the tops of price pattern.

* Dont short longterm a stock when the 200 Day MA is rising

When lower MA# is on top of higher MA# market is usually in uptrend. (ie: 15pd above 50pd)

When higher ma is on top of lower ma, market is usually in downtrend

Momentum Indicator=Study that Measures a security's rate-of-change and displays it as a ratio. The ongoing plot line moves above and below 100. By looking for divergences, centerline crossovers and extreme readings, bullish and bearish interpretations are found. See rate of change for percentage of this study. See chart configuration under day trading notes.

Money Flow = Study Indicator Calculated by averaging the high, low, and closing prices, and multiplying by the daily volume. Comparing that result with the number for the previous day tells you whether money flow was positive or negative for the current day. Positive money flow indicates buying pressure. Negative money flow indicates selling pressure. See chart configuration under day trading notes.

Money Flow Index = Study that Compares “positive money flow” to “negative money flow.” Compare this indicator to price in order to identify the strength or weakness of a trend. The MFI is measured on a 0 - 100 scale and is usually calculated using a 14 day period. It is related to the Relative Strength Index, but where the RSI only incorporates prices, the Money Flow Index also accounts for volume. See chart configuration under day trading notes. See chart configuration under day trading notes.

MA/Moving Average=Moving Average The average of a stock’s price or volume over a specific time period.

(SMA=simple moving average--see below) See chart configuration under day trading notes.

MACD = An indicator study that follows the difference between a series of moving averages. The indicator has two lines, the MACD line (yellow) and a signal (aqua). A buy signal is generated when the MACD line rises above the signal line. A sell is generated when the MACD line falls below the signal. Because the MACD is generated from moving averages it is has a unique ability capture wide swinging moves in markets. Divergence, trendlines and support lines can also be applied to the MACD to generate additional signals. MACD stands for moving average convergance divergance. Most software use range +100 to -100 with zero as median line. Most traders agree that MACD gives better signals on the longer term instead of day-trading/intra day. But feel free to try it. Dont confuse it with stochastics oscillator.

--- Signal line (usually dotted/aqua) - "slow" 9 period EMA of the MACD - When the MACD line travels below the signal line the price is usually falling in a downtrend. You'll stay short and bearish.
__ MACD line (straight/yellow) - "fast:" line - Generally when the MACD line rides above the signal line the price is in an uptrend and you'll concentrate on long positions

a Some invenstors like to buy when the MACD line crosses above zero and sell when it crosses below zero line.

a MACD loses effectiveness in horizontal markets Bottom line, use it in uptrend or downtrending markets

See chart configuration under day trading notes.

MIT = An order to purchase or sell a security as soon as a specific price is reached. Once the security reaches a certain price, the order automatically becomes a market order. A Market if Touched order is an order designed to buy (or sell) a contract below (or above) the

market.

MOC = Market on close. A type of order, which requires that an order be executed at or near the close of trading day on the day the order is entered. A MOC order, which can be considered a type of day order, cannot be used as part of a GTC order.

naked short = naked short is a sale of stock in which a stock broker does not find the stock sharesto borrow within 3 or 13 days. A retail investor is not allowed to naked short, but a market maker is allowed to have a naked short for "bona-fide market making."

OPTIONS = (see also futures) An option is a contract which gives the buyer the right (but not the obligation) to purchase (or sell) the underlying STOCK/SECURITY at a specific price (strike price) for a set period of time. If the option is not exercised by this set date, it expires and no longer has value. The investor pays a premium in order to get the option. Options only trade during normal market hours. See Section on OPTIONS OPTIONS OPTIONS in this file!

OVERSHOOTS: When stocks tick a .50 increment they tend to have slippage above and beneath that level by .10, identical to coil support and resistance levels. (ie: to clip the overshoots at 51 on MSFT means to sell your longs up to 51.10) *n*

par value = The face value of a bond. *n* What confuses many people is that the par value is not the price of the bond. A bond's price fluctuates throughout its life in response to a number of variables (more on this later). When a bond trades at a price above the face value, it is said to be selling at a premium. When a bond sells below face value, it is said to be selling at a discount.

PARE = *n* Means to scale out of a position, eg: if you own 1,000 shares of MSFT, means to sell a partial amount at higher increments like 700 shares out at 49.70 and 300 shares out at 49.90 Take profits on some of your position. Paring only applies to traders who trade atleast 1000 shares. You pare because a short time frame signals exhaustion while a wider time frame signals continuation.

program trading = Computerized stock trades involving the purchase or sale of a basket of 15 or more stocks generally with a total market value of USD 1 million or more, using metrics and algorithms based on market analysis and experience.

pullback=stock opens high and falls down bout 15-20 after open then slowly rises back

Good time to short then or buy in the dip

PE=Price/Earings Ratio, Price of a stock divided by its earnings per share./Buy stocks with P/E of $10 or so or higher. Assume XYZ Co. sells for $25.50 per share and has earned $2.55 per share this year; $25.50 = 10 times $2.55. XYZ stock sells for ten times earnings. Def2: A stock's market price divided by its current or estimated future earnings per share. The PE Ratio is used by investors as a fundamental measure of the attractiveness of a particular security versus all other securities. The lower the ratio relative to the average of the sharemarket, the lower the market's profit growth expectations. def3: The most common measure of how expensive a stock is. The PE ratio is calculated by dividing the earnings per share figure into the market price of the shares. If a company has earnings per share of 35p and the market price is 500p, the shares have a PE ratio of 14.3 (500 divided by 35). Another way of saying this is that the shares are selling at 14.3 times earnings.

PEG=Buy stocks with PEG less then 1. A valuation measure which which compares the P/E ratio of a company to its earnings growth rate (Price/Earnings to Growth, hence PEG). The P/E and earnings growth rates used can be either trailing numbers or forward estimates.

PIVOT points=*n* Points, based on Fibonacci numbers, at which market direction is expected to transition to a different trend. Buy if price is far approaching R1 or R2. Wait for it to close above those points if its near they are resistance. When falling close to S1 or S2 dont sell short it may bounce back up from support. A lot of trading programs have and mainly forex programs. They are based on yesterdays high/low close. *n*

Pivot Points Calculation:

H – Yesterday’s High

L – Yesterday’s Low

C – Yesterday’s Close

The five equations for the Pivot Lines are...

Red Line: P = (H + L + C) / 3

Blue Line: R1 = 2 * P - L

Green Line: S1 = 2 * P - H

Yellow Line: R2 = P + (R1 - S1)

Yellow Line: S2 = P - (R1 - S1)

P/S Ratio=less then 2 is A ok (price share ratio)

P(UP) = *n* PowerUPtik breakout, a flatline 5 period resistance and a rising 15 period support that breaks out when 5 period breaks higher. PUP! The 5 Period MA will go sideways and the 15 MA will go higher. Eventually the 5 will break, squeeze the shorts and burst higher. In most cases a PUP will be followed by a mini-inverse pup which then forms a make or break situation. This initial mini-pup/slip suckers shorters in that can get hammered out quickly.

mini-pup = same thing but found on the stochastics chart instead of the candle chart

If the noodles are forming a 3 min moving average PUP then most stocks will lift/rise

premise = to set forth beforehand as an introduction or a postulate b : to offer as a premise in an argument. in stocks to check stuff before making a trade or discuss (same def duh)

profit margin=A ratio of profitability calculated as gross earnings divided by revenues (or, said another way, gross profits divided by sales). It measures how much out of every dollar of sales a company actually keeps in earnings.*n*

Profit margin is very useful when comparing companies in similar industries. A higher profit margin indicates a more profitable company that has better control over its costs compared to the competitors in the industry. Profit margin is displayed as a percentage; a 20% profit margin, for example, which means that the company has a net income of $0.20 for each dollar of sales.*n*

proshares = 1. Ultra Dow30 ProShares (DDM). ETF with an inverse relationship. Ie: If you buy PSQ your actualing going short on the QQQQ's. These are good for accounts that will not allow shorts (ie: 401k) for a standard day trader they are useless because you can just short the QQQQ's.

2. Ultra MidCap400 ProShares (MVV)

3. Ultra QQQ ProShares (QLD)

4. Ultra S&P500 ProShares (SSO)

5. Short Dow30 ProShares (DOG)

6. Short MidCap400 ProShares (MYY)

7. Short QQQ ProShares (PSQ)

8. Short S&P500 ProShares (SH)

Rate of change = Rate of Change: Identical to Momentum study, except that the Price ROC indicator displays the rate-of-change as a percentage whereas the Momentum indicator displays the rate-of-change as a ratio. See chart configuration under day trading notes.

rally=A sudden, significant rise in the price of an individual security or in the market as a whole.

Reit Fund=Real Estate Investment Trust

ROE=Higher # is better/Return on Equity. ROE is an accounting ratio of net profits divided by equity. Measures company profitability relative to its capital base.

Relative Strength RSI: Study in direct pro. Related to the Money Flow Index, but incorporates only prices, not volume. RSI is plotted on a vertical scale from 0 to 100. Values above 70 are considered overbought and values below 30, oversold. When prices are over 70 or below 30 and diverge from price action, a warning is given of a possible trend reversal. See chart configuration under day trading notes.

Relative Volatility Index: Study Used to measure the direction of volatility. RVI is identical to the Relative Strength Index, except that it does not measure price as an indicator of market strength. RVI is plotted on a vertical scale from 0 to 100. Values above 50 indicate an increase in volatility (rapid changes in stock) See chart configuration under day trading notes.

RSI=Relative Strength RS Indicator IBD, Exclusive rating in Investor's Business Daily. This IBD SmartSelect® Corporate Rating measures each stock's price performance over the latest twelve months compared to all other stocks 0-100

Reserve order = *n* Allows you to place a smaller size on Level 2 while actually trying to sell much larger sizes (eg: showing only 200 shares on the ASK on MSFT on Arca, Redi or Inca to bleed out 2,000 shares in reserve...PROCEDURE: Make sure that your order entry bar is set up for "Normal". Using Display you will need to make sure that your "order type" is a Limit order, Route needs to either be ARCA or INET. Example if you are wanting to sell 10,000 XYZ and you only want to show 1000 XYZ at a time so you don't spook the market you will do the following (second attachment). Everytime a 1000 XYZ shares are sold then it will automatically refresh with another 1000 XYZ until the order is filled completely.

Resistance=is when sellers prevent stocks from rising any higher and dump out, graph line will decline at common points

Resistance=sellers. Buy above support and sell below resistance.

*n* Support/resistance levels rarely break on the first attempt unless extremely heavy volume.

Scalping=aka Front Running, The practice of trading in and out of the market on very small price fluctuations usually just enough to capture the spread. Try if you'd like.

Slang: Clips

secondary offering = The sale of securities by an issuer or underwriter after a company’s securities have already begun trading publicly.

The only way to profit from a secondary offering is to short it if you can catch the announcement early.. So no..

SELLFADE: noodles move UP and stock MOVES DOWN (see BUYFADE it is the opposite)

SMA = A simple moving average is formed by computing the average (mean) price of a security over a specified number of periods. While it is possible to create moving averages from the Open, the High, and the Low data points, most moving averages are created using the closing price. For example: a 5-day simple moving average is calculated by adding the closing prices for the last 5 days and dividing the total by 5.

Specialist=Slang: AX, An NYSE member who is designated to maintain a fair and orderly market in a specific stock or group of stocks. Specialists prevent imbalances in supply and demand, and they have their own inventory of stock.

They tend to buy in blocks of 500, 100, 2000 Shares. Look for um. Also called Market Makers

SPOOS= *n* Slang term for S&mp;P 500 futures Symb: ES

Spread=diff between buy and ask

Support=In technical analysis, a price level at which a stock has a tendency to stay above

Sell a stock when it breaks BELOW support level. If its right at it and ticks up, buy.

Support=buying (see resistance) Buy above support and sell below resistance.

Support/resistance levels rarely break on the first attempt unless extremely heavy volume.

Short=*n* Selling a stock you do not own in hopes of buying it back at a lower price later on. Your broker lets you 'borrow' these shares and you must return them (hopefully at a lower cost to you). Can Only short on up tick/Make sure stock is in a down trend when shorting (unless doing emini futures)

Short covering is when shares are purchased to replace the shares previously borrowed. Consider buying puts instead

Be mindful of support levels on charts when shorting. Look at MA's You can also buy a put if there are no short shares available for borrow.

Short Interest=Short interest is the total number of shares of a particular stock that have been sold short by investors but have not yet been covered or closed out. This can be expressed as a number or as a percentage. NASDAQ high short interest=stock may go up soon, NYSE is more of a bearish sign. You can find this out at nasdaq.com even for NYSE stocks. Dont short an issue having large short interest alrady. The buy to cover will cause a lot of buying to happen driving the price back up.

http://finance.yahoo.com/q/ks?s=MOVI (where MOVI is symbol u want)

Simons, James Harris: - James Harrir Simons. Very wealthy man who runs a hedge fund.

Ref: http://en.wikipedia.org/wiki/James_Harris_Simons

SLEEPING WITH: holding an open stock position overnight

-$SPX is S&P 500 Index

Standard Deviation: A statistical study that provides a good indication of volatility. It measures how widely values (closing prices for instance) are dispersed from the average. The larger the difference between the closing prices and the average price, the higher the standard deviation will be and the higher the volatility. The closer the closing prices are to the average price, the lower the standard deviation, and the lower the volatility. George seems good on 13 today. See chart configuration under day trading notes. *n*

ref: See BBS def too

squawk box - pit audio. terms: http://daytradingthecourse.com/spnotes.doc

Suawk on a regular futures contract is much more useful then the e-mini

Also go to www.realtimefutres.com to subscribe to ben. Mention refered by John Carter for 40% discount!

SSS: Same Store Sales - retailers use to report numbres

STICK: *n* $1/share

STONE: *n* $1,000

STICKY 5'S LEVELS: *n* stock prices when they reach increments of 5, subtract .60 and add .60 to the level for the sticky 5's range, eg: at $55.00 - 54.40 x 55.60 is the sticky 5's range, 24.40 x 25.60 is the sticky 5's range, 9.40 x 10.60 is the sticky 5's range) these levels should be considered additional support and resistance levels especially when they test the first time on wider channel panics

Stop order (or stop):

An order to buy or sell at the market when a definite price is reached, either above (on a

buy) or below (on a sell) the price that prevailed when the order was given. Stop to mean "this price or worse."

*Try some buy limit stops out. Good to setup "if" entry and exit scnearos

*ABOUT LOSSES/STOPS:

• Stops are Part of the Game. Place trail stops below pivots. .10 to .25cent

• Pauses in your Trading. Putting oneself into a position where defeat is impossible.

• Stops based on type of Trade and Premises

• Scalpers - If 1 min stochastics and noodles fail, stop

• Swingers - If 3 minute trends breaks down, stop utilizing 15 pd (period) support breaks

• The Fine Line between Conviction Versus Stubbornness

• 2-1/2 Point levels serve as the immediate support and the next resistance, Premarket too. These are Speed Bumps on Momentum and always areas for entry or Exit

• Stops are an EXPENSE

• Stops are simply a PAUSE in your Trading to Reevaluate - Nothing More

STOCHASTICS OSCILLATOR=Study(pronounced stow-kas-ticks) (p186) Stochastics consists of two lines: %K, which is the basic calculation/main line, and %D, which is a moving average (typically three days) of the %K line. Most charting software offers fast or slow stochastics (that means the %K is smoothed with a value of 1 for the fast and 3 for the slow). Toni default for %K=14 periods with an internal slowing period of 3 periods. Leave software to default for now. Expirment with fast and slow and decide. Stochastics tells us where a securitys price closed relative to its highs over a designated time peroid. Stochastics "sees" the sinking closing prices and alerts by hooking the %K line down and crossing below the %D line in a sell signal. In a bullish parttern the %K comes up from under the %D and crosses to the upside for a buy signal. Dont buy solely based on this tool. Use other indicatiors: MA's, Volume etc.. If you are planning on a core or long trade you may choose to ignore stochastics signal. Its for the shorter term. Fast weights the short term. Slow uses a wider range of data and is considered more reliable.

a Signals: Buy when %K rises above %D, Sell when %K descends below %D
a POP: is when %K moves to %D but doesnt touch it then reverses back indicating trend continuing or it can also mean high volume
a Buy when indicator is below 20 (over sold), Sell above 80 (over bought)
a Always check VOLUME/OBV in conjunction with this and all tools

a AlBuy when the %K line pierces through it at an up angle. Not when it lowly intersects at a low angle if this happens you may want to short or see price go south. %K is the fat blue line on esig or 5pd.

One fallback of stochastics is that a stocks price action can register an overbought or oversold signal quickly. If the stock continues to rise without many pullbacks or fall with shallow rallies the indicator "glues itself" to the top or bottom of its scale and can stay there.

See chart configuration under day trading notes.

syndicate pricing - Its an IPO or Secondary pricing.

synergies - combined action or operation of multiple things

Technical analysis=Study of charts, moving averages, volume

TIGHTING/TIGHT CHANNELS: *n* this refers to the moving averages charts, as the 5 and 15 period simple moving averages indicated the trend channel. rule of thumb, when the space between the 5/15 period is less than .15 then it is a TIGHT RANGE--- this usually is light volume and should not be overtraded as there are many headfakes and wiggles

thin = stock with low realative volume, crappy atr, spread wide, routes minimal. If its midday and only traded 100k shares then its very thin.

THREE LANE HIGHWAY: *n* A setup where the 3/13/60 minute stock & noodles stochastics are moving in the same direction on the noodles and or your stock. Including the 5 & 15 moving averages!! The 3 min will usually turn to indicate entry 3lane highways are prime setups, watch the 60 minute, gauge the 13 min and time entry with the 3 minute. Use 5 days of data for 60 min chart. 5 Should ride above 15 on longs and below on shorts!!!

THREE PRICE BREAK: Japanese candle stick pattern in which body of 4th candle breaks above the bodys of the previous 3. Ex in chart images directory. *n*

TICKER=Shows all trades going on like an old stock ticker. Uptick transactions are in green, red are downtick. Prints are updated at the bottom. This is true for Time & Sales screen as well.

Time & Sales= Research public trades executed that day (or up to five trading days prior). Uptick transactions are in green, red are downtick. Prints are updated at the bottom.

Top-Down Investing=An investment approach where an investor looks at a country's economy before considering an industry to invest in. Next, they determine what industries or sectors will return well because of the economic conditions and, finally, they then buy stocks that are attractive within that industry.

total/market capitalization=A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as "market cap". *n*

trade deficit = a negative balance of trade in which a COUNTRY imports more than it exports.

trade lingo; BTO=Buy to open BTC=Buy to close STO=Sell to open STC=Sell to close SSHORT=Sell Short

Trail Stop

A trail stop is used for the purpose of keeping your profit when you are trading. Think of it as a ratchet. Say you buy a stock at $20 and you place a $.05 trailing stop on the stock that you purchased. When the stock goes up to $20.50 your exit (sell) point is now $20.45. So the trail stop will ratchet up 05 behind your stock as it rises to keep you profit. When placing a Trail Stop order, you can place it and walk away. It will be held on our servers until it is executed. You do not have to stay logged into Rushtrade platform. Trail stops do not work during Pre and Post market hours. Only Limit orders are allowed during these hours. When executed a trail stop becomes a Market Order.

Using a trail stop on a short is just the opposite of going long the

stock. If you place a .05c trail stop on a stock that you short for

45.50 and the stock goes down to $45. Your trail stop (exit position)

is now at $45.05. If the stock decides to rise back up you will buy the

stock back at 45.05 keeping a profit of .45c/ share.

Trail Limit = The difference between a Trail and a Trail limit is that a Trailing stop (Trail) becomes a market order when triggered. A Trailing stop limit (trail limit) becomes a limit order when triggered.

Trend = when the 5pd crosses over the 15pd and the bbs's expand on the 8 and 13 min chart then you can say its trending up. Make sure there is room to the upper bbs for a move. (or lower if your shorting)

TICK=index keeps track of # of stocks ticking up and down +120 means 120 more stocks are ticking up then down. $tick

TRIN=Measures advancing stocks compaired to decling. Medium line is 1.0, under 1 is positive bullish aka buying pressure, over 1.1 is negatative/bearish aka selling pressure. Abbreviation for Trading Index. $TRIN usually symbol or $TRINQ for Nasdaq. These only update 9:30-4pm

Weekdays = Most stocks seem to gap down friday evening

Tripple-Witching Hour = Slang for the quarterly expiration of stock?index futures, stock?index options and options on individual stocks. Trading associated with the expirations inflates stock market volume and can cause volatility in prices. Occurs on the third Friday of March, June, September and December. Very choppy day!!!!!!!!!! Stay the f out. Take a vacation day.

Options Expiration - Dont trade or use auto systems options expiration day or the following monday

UPTICK = Price change in an upward direction on last trade. EFT, Futures, & Forex are NOT subject to the shorting uptick rules!

UPGRADES/DOWNGRADES = Updated every 20 min in direct web platform. See stragety for trading these

VIX=(VIX) measures the volatility of the market and is used to determine risk. Traders use the VIX as a general inverse indicator of market volatility and sentiment. When the vix rises, the market falls. (like trin) IX values greater than 30 are generally associated with a large amount of volatility as a result of investor fear or uncertainty, while values below 20 generally correspond to less stressful, even complacent, times in the markets.

VOLATILE - characterized by or subject to rapid or unexpected change. volatility is nice. You can use min and max volititily settings in TRADE IDEAS

volatitily = The up-and-down movement of a security's price over time. The greater the volatility, the greater the chance of a profit or risk of a loss in a short period of time.

Volume Plus = Study Shows the number of shares traded in a stock during a given period

Red Candlestick--Indicates a negative change in volume for the unit of time selected.

Green Candlestick--Indicates a positive change in volume for the unit of time selected.

Blue Candlestick--Indicates no change in volume for the unit of time selected

VWAP=Volume Weighted Average Price, which is calculated by dividing the value of trades by the volume o ver a given period. A closing 10 minute VWAP is used to set closing prices on the order book.

Warrant=See options

Weekend Effect=A common occurrence in which stock prices tend to be negative Friday through Monday. 69% True verified with charts. Maybe shorting on monday would be a good rule.

Wiggle = Tick against your position (when all the other charts are still going with your trend entry)

Williams %R: Much like Stochastics, Williams's %R is useful for measuring overbought and oversold stock levels. The scale ranges from 0 to -100 with readings from 0 to -20 considered overbought, and readings from -80 to -100 considered oversold. Typically, Williams's %R is calculated using 14 periods and can be used on intraday, daily, weekly, or monthly data.

Window dressing = Denotes the selling of weak performing stocks or bonds by money managers just before the end of each reporting quarter, so they don't appear as significant investment positions.

Window dressing occurs March 31, June 30, Sept. 30 and Dec. 31. Russell rebalancing occurs every year on the last trading day before June 30. Witness the flurry of buys and sells on Friday, especially toward the end of trading hour.

worse for wear = a better trade! (if its a short)

YTM = Yield to Maturity - The rate of return anticipated on a bond if it is held until the maturity date. YTM is considered a long-term bond yield expressed as an annual rate. The calculation of YTM takes into account the current market price, par value, coupon interest rate and time to maturity. It is also assumed that all coupons are reinvested at the same rate. Sometimes this is simply referred to as "yield" for short. *n*

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######### Software Notes: - 0.8

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Complex Trading Software

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TradeMaven www.trademavenllc.com

Stragety Runner www.strategyrunner.com

NinjaTrader www.ninjatrader.com

Trade Ideas LLC

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(DT) = May be good for day trading

Make Sure: Confirm Trade Alert with Momentum bars and MACD on charts

Wait until 10:30am or after for the strict alerts and gaps to level out.

High Realtive Volume - Indicates high vol. only relavant to that day. no long periods

Filtered: Combines multiple alerts into one. Daytraders often prefer to display the unfiltered versions of these alerts on a large set of stocks.

Confirmed Alerts: The alerts listed here require statistical confirmation before they appear. This filters out noise, but requires a slight delay. (delay depends on volume) Usually 15 Min or so

Unconfirmed Alert - 90 Seconds or so

Rectangle Bottom & top - (DT) A rectangle is defined by a series of highs and lows where each high is at approximately the same price as the other highs, and each low is at approximately the same price as the other lows.

BRACKET TRADER BTF

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Making a stragety do list:

* Change TIF to GTC

* After your first trail is hit you can unlick trail box to manage manually

* Reverse button is useful. As well as 'Stop and Reverse' checkbox

* Make sure dang set to market

* Change stop BE method to entry -3 (or whatever your particular stragety calls for)

* Set scale out targets, make sure t2 and t3 are far off for manual management

* Set # of cars

* Set trailing mode to always and make sure it works with Feature Tester

Notes/Suggestions on Stragety:

[Steveo] Initial stop 10, Using +6 +11 +20 for targets. Uses BE -5 on first target, then BE on second. He using 3 cars. If using 2 cars just put in 10 pt trail stop after target 1

[Bear's] Initial stop 9, +7 stop to BE -5, +11, +Run. If using 2 cars just put in 10 pt trail stop after target 1

Testing

Trades 8/21/06 with stragety: Cur: -43 Steve -5 Bear 11

Trades 8/22/06 with stragety: Cur: -7 Steve -16 Bear -11

Trades 8/23/06 with stragety: Current -37 Steve 63 Bear 64

Current trategies:

NME: Default (same as 2m squeeze) (Adapted from bear)

CAR: 2 Contracts

MDE: 2 Step (so T3 dont even matter)

STP: 9

TRL: Trail 10 pts (rachets up after T1+10 reached)

T1: 7

T2: 90 (space for running/manual exit)

T3: 130

BEM: -5 After T1 exit stop to break even -5

LMT: All mkt entry and mkt stops

EXT: Final exit managed by you. Mo bar/tick extremes etc or let BT prof stop hit

NME: Squeeze 2m/233

CAR: 2 Contracts

MDE: 2 Step (so T3 dont even matter)

STP: 9

TRL: Trail 10 pts (rachets up after T1+10 reached)

T1: 7

T2: 90 (space for running/manual exit)

T3: 130

BEM: -5 After T1 exit stop to break even -5

LMT: All mkt entry and mkt stops

EXT: Final exit managed by you. Mo bar/tick extremes etc or let BT prof stop hit

NME: Squeeze 5m

CAR: 2 Contracts

MDE: 2 Step (so T3 dont even matter)

STP: 20

TRL: Trail 15 pts (rachets up after T1+20 reached)

T1: 10

T2: 90 (space for running/manual exit)

T3: 100

BEM: -5 After T1 exit stop to break even -5

LMT: All mkt entry and mkt stops

EXT: Final exit managed by you. Mo bar/tick extremes etc

NME: Tape Scalp/Also tighter target/stop can be used on light vol days

CAR: 2 Contracts

MDE: 2 Step (so T3 dont even matter)

STP: 8

TRL: Trail 8 pts (rachets up after T1+8 reached)

T1: 5

T2: 30 (space for running/manual exit)

T3: 40

BEM: -3, After T1 exit stop to break even -3

LMT: All mkt entry and mkt stops

EXT: Final exit trail stop is pretty tight (8 pts) Or you can manage it

NME: bobbie Generic

CAR: 4 Contracts

MDE: 3 Step

STP: 11

TRL: Trail 10 pts (rachets up after T1+8 reached)

T1: 10

T2: 20

T3: 90 (space for running/manual exit)

BEM: -3, After T1 exit stop to break even -3

LMT: All mkt entry and mkt stops

EXT: Final exit trail stop is pretty tight (10 pts) May want to widen after profitable

Notes:

BA - Select BA instead of Market for Limit orders on Bid or Ask

Breakout/Fade - Its for box/consildation ranges.

Ie: Stick one on either side and snag which ever way it breaks out. Ahh like having

a buy stop for a long and sell stop for a short in place to pick which way the

market will break out. Tested. Works nicely. Input long trigger and short trigger.

Select stragety and hit Breakout/Fade

DOM - Book Trader/Depth of Market Tool (left click buy limit,

right click buy/sell stop breakout order)

Yellow=pend, fill long=green, fill short=red, stop=grey

BE Mode - Break even mode?

X - Click X next to Stragety for summary of current settings

IB TWS

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Symbol Notes

TICK - TICK-NYSE

HotKeys (page lines)

Delete - Cancel Order/Del Rows

Ctrl-Back Quote - Cleanup Orders

Ctrl-B - Show Book Trader (you can grab and slide!)

Ctrl-C - Cancel All Orders

Ctrl-O - Open order TICKET

Ctrl-Q - Close Position

T - Transmit

D - Market Depth/Level II

N - News for selected line

B - Attach Bracket Order

AltLftClk Bid - Buy w/ trail

AltLftClk Ask - Sell w/ trail

LftClk Bid - Sell on bid

LftClk Ask - Buy on Ask

Shft+Left Clk Bid - Buy/Bid LMT INSTANT! (.03 discreation)

Shft+Left Clk Ask - Short/Sell LMT INSTANT! (.03 discreation)

Book Trader/BT

LftClk Quote Bid - Buy lmt

LftClk Quote Ask - Sell lmt

AltLftClk Quote Bid- Buy MARKET INSTANT

AltLftClk Quote Ask- Sell MARKET INSTANT

LftClk B.T. Bid - Buy LMT at Book Trader Price

LftClk B.T. Ask - Sell LMT at Book Trader Price

Ctrl-RgtClk B.T. Bid - Buy STP LMT +.15c leniency

Ctrl-RgtClk B.T. Ask - Sell STP LMT -.15c leniency

RgtClk B.T. Bid - Buy STP (will execute market)

RgtClk B.T. Ask - Sell STP (will execute market)

AltLftClk B.T. Bid- Long LMT @ Book Trader Price w/ Bracket - use for ym

AltLftClk B.T. Ask- Short LMT @ Book Trader Price w/ Bracket - use for ym

AltRghtClk B.T. Bid- Buy STP LMT @ Book Trader Price w/ Bracket

AltRghtClk B.T. Ask- Sell STP LMT @ Book Trader Price w/ Bracket

Click QUOTE Ask- Sell HIDDEN INET. Click hidden on order col then T

Click QUOTE Bid- Buy HIDDEN INET. Click hidden on order col then T

R - Re-Center

COLORS - Green (Ask Price/Size), Peach/Yellow (Bid Size/Price), Purp (Last Exe)

Gen Notes:

- Audit trail may be useful for initial trade analyzing

- TRAIL BY %: When adjusting the trailing offset amount (Aux. Price), select % (instead of AMT). If you have any further questions, please feel free to contact us again.

- You set order default route when you first enter the stock in the quote line.. duh!

- Page menu: SORT!!

- Chat only seems to work in mkt hours

- Highlight a market data line before selecting ORDER TICKET to autofill some information

- Right click on order entry line to ATTACH an auto stop, trail or bracket!

- See how certain options play out with analytics

- You are only allowed 40 lines of active market data streams (visible lines)

- The AUX field holds stop/limit price and offset for relative orders (trail)

- Pending page allows view of all working orders (system page, cant modify it)

-If you create a page layout called Pending this layout is assigned to your pending page next login

-Right click on untransmitted orders to do conditional orders, IFs

-We do not recommend using trailing stop orders, as there is no guarantee that your order will be filled at or near the designated stop price, which is especially dangerous in rapidly rising or falling markets. In addition, trailing stop orders will accentuate volatility in rough markets.

New Terms:

Bracket order - Creates and order with a stop and a profit taking point (like trade ideas). Its the bomb. Find out if stop goes to LIMIT or not?!!?

Scale order - incrimental sell (maybe good for pairing out). Right click on order. Its under "create"

Sweep order - Checkbox matches exact quantity offered/available to what you want and sends exchange a matching order (talk about fast execution!) Good but may lose you money. Use if want to get in or out of a postion quickly.

Discretionary order - A Discretionary Order is a limit order for which you define a discretionary amount (which is added to or subtracted from the limit price) that increases the price range over which the order is eligible to execute. The original limit price is displayed to the market.

Brut - Exchange that allows many advanced orders. PEG STK to Market/Peg To primary

AUCTION - Order submitted at the calcuated opening price. If order doesnt execute. Its resubmitted as a limit order at best bid or ask

GTD - Good til date TIF

FOK - Fill or kill TIF

PEG - Order in cybertrader (maybe ib has) it pegs the bid/ask price and automatically replaces your order as they change.

IOC - Immeidate or cancel TIF

REL - A Relative order is an advanced order type whose price is dynamically derived from a combination of the market quote and a user-defined offset amount. The order is submitted as a limit order and modified according to the pricing logic until it is executed or you cancel the order.

OCA - One cancells all. When an order is executed, the remaining orders in the group are canceled.

MOO - (market-on-open) is a market order executed at the market's open at the market price.

LOO - OPG/A (limit-on-open) order is a limit order executed at the market's open if the opening price is equal to or better than the limit price

REL - Relative Order

VWAP - (Volume-Weighted Average Price) orders are supported for large cap securities only.

BOX TOP ORDER - Order sent at best mkt price. If order doesnt fill 100% then remainder of order is resubmitted as a limit order with limit price set to price at which market order was executed. Usually used for options. This is also known as MLO or market-to-limit order or MKT PRT for futures/options on Globex.

ICE BERG ORDER=Lets you show smaller shares then your actually selling. Use Disp. Size column (display size)

STOP LIMIT (STP LMT) Info:

AUX FIELD = Stop Trigger Price

Limit Price = Lowest/Highest Limit on Trade Execution

eSignal Charting

_________________

Future: ECN Book Depth, Forex, Level 2, add NYMEX exchange for commodities (oil wheat futures)

Exchanges for ib: ECBOT (ym), GLOBEX, SMART

Alerts - Use these NOT fricking IB's (bell icon)

Last high is >= INPUT

Last low is <= INPUT

Layouts - Dynamic changes made to chart or watchlist carry to other lists-use this

Pages - All data saved in that page. Changes made dont carry over to other saved. Using pages because layouts was sloppy.

Time Intervals - ##T for ticks, ##S for seconds, ####V for volume charts

##P for price change bars(50P, 233T, 30S, 1000V), 15 (15 min)

Price change bars ex: If there were, in order, 3 trades at 9.25, 2 trades at 9.50, and then 7 trades at 9.25 again, then 3 price changes have occurred.

pages.

Chart I S - Interval Linking/Symbol Linking (interval for chart only)

Favorites - + on top of charting tool bar. Handy. Properties to remove.

EFS - Esignal Formula Script - Java add ons for charts

Cut n Paste - Works in watch list from standard text symbol list

Alert Ticker - Displays alerts in ticker window or you can do pop/sound

Knowledge Base - http://kb.esignalcentral.com/

Intergrated Trading - Bug. Need to have a decimal point . and number (not 0) after YM entry from eSignal

**TIME NOTE** - Make sure to give esig enough time to calculate MAs. Ie: 200PD MA on a 60min chart for 2 days doesnt work! You need 200 candles!!! That would only be 48 candles (1 per hour hence 60 min chart)

Misc: No way to adjust the tickness of fibonacci lines, no rearm delay for alerts, no tabbed pages, no free hand drawing on chart

Esignal News Manger Keywords

Search query in eSignal news manager only seems to work with right click options checked 'Any of these words, Whole Word'

merge,acquire,deal,fda,halted,sec,inquiry,police,higher,lower,raise,upgrade,downgrade,guidance,files,eps,begin

Esignal HotKeys

F2 - Pop up noodles 60M Chart

F4 - Leaders/Losers Mini Scanner

F5 - Load style template

Alt-1 - Time & Sales Ticker (sym link green)

Alt-2 - Turn window title bar back on/off\

Alt-4 - Toggle AUTO SCALE!! darn frick!

Alt-5 - Toggle AUTO Scale price data only. frick2!

Alt-A - fibonAcci retracement tool on hotkey.. A for ACCI!

Alt-B - Backtesting - Start back tester tool

Alt-E - Enter text comment .. ENTER! E.. its easy to remember bitch

Alt-C - Close all pages

Alt-G - Goto date/time on chartf! Very helpful

Alt-O - Order ticket screen

Alt-L - Horizontal line tool

Alt-K - Draw trendline that you KAN! trend line

Alt-N - New advanced CHART

Alt-S - Save Page

Alt-F - FIND Symbol aka Symbol Search

Alt-D - Save current item AS (its next to the S!!)

Alt-T - Turn off cursor tracking on current chart

Alt-V - View EFS Editor (use it)

Alt-W - Cursor Window Toggle

Ctrl-A - Alerts!!!!!!!!

Ctrl-S - Save current object or active item

Ctrl-R - Reset current chart to default view

Shift 3 - Creates divider row in watch list

Shift-Clck-Drag - To Merge Studies on charts!

Page Shortcuts: Alt-R: Reload Page

Alt-Z Previous Page

Alt-X Next Page

Tick replay: $PLAYBACK is the symbol to use on chart

Esignal Market Statistics Symbols

eSignal useful sites:

advancedget.com - advanced get piviots plugin

woodiesscciclub.com 20,c CCI - live throughout the day with hotcomm

http://www.esignalcentral.com/university/esignal/tutorial/default.asp

Pit

====

IRC Pit Commands

/me

/dcc

/nick

/notice nick msg

/whois nick

/away

-----------------------------------------------------------------------------------

######### Taxes Notes: - 0.9

-----------------------------------------------------------------------------------

-Find out more about being IRS qualified for 'mark to market' status

which is the way to go for day traders. According to everyone in the pit at least.

- * TAX TIP: With futures you dont have to list each individual trade on your 1040 like you do with stocks!

Day Trade Part-Time

Thursday, April 30, 2009

Wednesday, April 29, 2009

20090429 RIM MM’s reputation

20090429 Fed Day

Tuesday, April 28, 2009

20090428 RIM

20090428 CAD/USD

Monday, April 27, 2009

20090427 RIM

20090427 ma200 5min

Friday, April 24, 2009

20090424 RIM

Thursday, April 23, 2009

20090423 RIM

Wednesday, April 22, 2009

20090422 RIM

Tuesday, April 21, 2009

MACD Training

20090421 RIM

20090421

Monday, April 20, 2009

20090420 RIM

Saturday, April 18, 2009

20090418

Friday, April 17, 2009

20090417 RIM

Moving Average

Thursday, April 16, 2009

20090416 RIM

Wednesday, April 15, 2009

Trading Strategy – Profit Objectives

20090415 RIM

20090415 #2 Notes from a trader

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