An accessible, reliable course for the
trader looking for profits in the competitive, dynamic world
of trading.
Each section of the book offers clear
examples, concise and useful definitions of important terms,
over 90 charts used to illustrate the challenges and
opportunities of the market; and how you can take advantage of
patterns. Written in the parlance of the day trader’s world,
you’ll enjoy the experience of being taught trading skills by
the best of the best.
This focused and effective trading resource
features seven key lessons to further a trader’s education
including market basics, managing trades, psychology in
trading and planning, technicals, utilizing charts, income
versus wealth building producing trades, and classic patterns.
It truly is as Paul Lange says, "Many of these lessons have
been taught to students worldwide over a span of 4 years.
These lessons contain powerful information that goes far
beyond the basics you may find in many introductory trading
books."
One measure of writing for traders and
investors (as perhaps with writing for all others), is the ah
ha! factor—a sentence or thought that provokes a feeling of
enlightenment or deep understanding with the reader. Our hope
is for numerous ah ha! moments to occur in these pages.
Trading is a somewhat difficult subject to
write about. As you learn and assimilate certain truths, these
truths often can and should change for you later. What seemed
quite profound to you at one time might seem a year later to
be obvious—and no longer worthy of being mentioned. What has
happened is that you have moved beyond this particular truth
to a newer truth, a higher truth. In such fashion, the growing
trader keeps moving beyond his own knowledge, outdating it.
At the same time, to someone new to the
game of trading, these are still new truths, capable of
changing one's thinking and approach, so in that sense, one is
wrong not to include them. The bottom line is that a trader's
approach continuously changes and evolves. Aside from the very
newest beginners, and the most experienced traders, almost
everyone in the market is at a different level of knowledge.
While I can't honestly say that Strategies
for Profiting on Every Trade was written as a companion volume
to my earlier book, Tools and Tactics of the Master Day Trader
(McGraw Hill 2000), the reader of that earlier work will
undoubtedly see a continuation of some of the ideas expressed
in that book. Tools and Tactics dealt more with the psychology
of the trader—his emotions, motivations, and
frustrations—Strategies for Profiting focuses more on the game
or activity itself.
This book is designed to address the needs
of both income and wealth producing traders. There is a strong
tendency to separate these two styles of trading into
completely independent skill sets and approaches. But it is
our view that not only can they not be split, but any attempt
to do so would result in automatically curtailing your
progress as a trader. In the same way that it is commonly
understood that both your left and your right hand play
equally crucial roles in everyday life, so do income trading
and wealth trading play equally important roles in the daily
lives of most successful traders. In other words, one should
never chose whether the income producing style of trading is
better than the wealth generating style, or visa-versa. Rather
one should look to become adept at both styles. This book will
teach you just how to accomplish that.
In chapter 1, Lessons on Getting Ready,
you'll be guided in how a trader should prepare for each day
and week. How you start will largely determine how you end in
this business. I have witnessed far too many traders sloppily
enter each week and each day without a plan and without a
proper list of stocks to watch. This will not be you, after
this chapter is assimilated.
In chapter 2, “Lessons on Some Basics,” you
will learn some very crucial things, such as how to deal with
the all-important first hour of trading. Not many traders know
that the pent up demand or accumulated supply built up
overnight often make the first hour of trading the most
volatile. The first 30-minutes of trading in particular are
very tricky. You'll learn how to deal with this all important
time period and turn it into opportunity. Did you know there
are nine other times during each day of which every trader
should be acutely aware? These nine reversal times, as we like
to refer to them, offer some unique opportunities for watchful
traders. You'll also be taught how to deal with the vagaries
of news and how it can affect your stocks for the positive and
negative.
Chapter 3 deals with two of the most crucial aspects of proper
trading, trade management and money management. The correct
management of your position always hinges on several things: a
favorable risk/reward ratio, a proper entry, and an
intelligently selected price target. Each aspect of a properly
executed trade will be reviewed in detail in this chapter.
The psychological aspect of trading
represents 85 percent of the game, in my opinion. As market
participants, we don't really trade stocks, options, bonds,
futures, currencies or any other financial instrument, for
that matter. In reality, we trade people, the people who own
those things I just listed. For any of the above items to
move, people have to make buy and sell decisions, and the
peoples' buy and sell decisions are incited by emotions,
namely greed and fear. In chapter 4, we talk about how a
trader is to cope with these two dominant emotions and how he
can use them for profitability. We also delve into the
challenge of always needing to be right and explain how the
loss of trades can be turned to your best advantage.
Chapters 5, 6 and 7, get to the meat and
potatoes of our trading method. We'll delve deeply into the
many chart patterns that we rely on every single day in the
market. You'll learn about several highly reliable trading
events that happen over and over again, the same way each
time. We'll show you how you can turn these events into
consistent profits. In these sections, we'll equip you with
many of the same trading techniques that we've taught to major
Wall Street firms and some of the country's top traders.
Lao-tzu said, “a journey of a thousand
miles must begin with a single step.” It is our belief that
the book you now hold in your hands can be the single step
that launches your journey to profitability. So read each
lesson carefully, take notes, and be sure to keep a journal of
the ah-ha! moments that strike you. I have always taught that
it takes only the mastery of two or three reliable strategies
to do extraordinarily well in the market. In these pages, you
will find far, far more than that. Use them well!
Oliver Velez
