Online Trading Academy DVD- Professional Trader Summary

EPS. EPS of a company is measured against its industry, if its lower than the industry EPS then its undervalued. if its higher then its overpriced
http://biz.yahoo.com/p/industries.html

the higher the spread the more the volatility and much more risky

concentrate with a spread of 0.5

buy low, sell high
buy near support, sell near resistant
 everything known or knowable is reflect in its price and volume 60 to 80% correlation
there is no real tool just a series of tools

intraday (5 min, 3 min, 1 min, tick)
Daily (1 year, 180, 90, 60 days)
Weekly/monthly (long term-decade charts)
 what chart to use in a situation?

OpenHighLowClose (OHLC)
Close most important. determines who won
trend line at 67% is as much as you can go. slope of the line

double top- upward trend just before the second top you will see longer candles and trend changes after

 be a defensive trader.

when you see the gap on a weenkend. wait 1 hour to see if there are any changes before trading.a gap down fills up 32% from the closing on friday.

if after gap down, within the house if you see goes up at 60% of the original price, the 60% chnage will close higher

while below 32% might close lower than the opening 70% of the time the percentage is based on fibonnacci

scalping-timeframe is seconds to minutes (need level 2)
very quick when you have alot of tickets.
objective is not to loose, if you do, loose very little
speed is everything-high cost of commissions-high buy power or many trades.

3 rewards to 1 risk
you need to have alot of cash because 100 shares is not worth it. you do 1000 plus shares

momentum trade.immediate momentum swing (need level 2)get out when you can not when you have to.
1 to 10 minute trader
if momentum is slow : GET OUT

swing trade: based on technical analysis. 10 minutes to 2 weeks(2 to 3 days to develop)
look for distinct trend or pattern trade and stick with it

position trader: weeks to months. uses technical anaylsis, stop loss at support lines. Larger risk.
alert to major changes in the market.ties up capital for long periods.

buy on a winner. if you want to buy 1000 stocks of a certain sector, try to find the top dog in an industry. 300 share of microsoft, 300 share of apple, 300 share of quest technology,which ever goes down the most, sell and buy on the one that goes up the most. when left with 2, sell the loss and add to the winner.

dont play mind games, STICK to your PLAN.maintain accuntability.
have an overall strategy (FUNDING, initial capital)
have an each trading day strategy. (think of loss and win on trading)

dont focus on the money, focus on the trade.
if you trade with less than 50% probability, your a fool. anything less, your a gambler.
dont count your chips when your sitting at the table. do that after your out of the game.

discipline is knowing you will follow your rules.
be consistent and repeatability. dont try to do home runs. if you can be profitable with a very small amount its only a matter of volume.

review your plan every day, dont change during trading.
if the plan of trading doesnt work a couple of times, then change or tweek it.
create a worksheet, when did you buy,what did you buy, why did you buy, what prices are there,what stop signs did you put, what is the profit margin.

your in and out according to rule, not anything else.Investors Business Daily.(Check this as a NEWS, they tell you why they think it

will go up through analytical technique. "PAY")
learn from the loosers.very important to learn if you loose, you cant always

win.

85-85-B-B-B is a rating.
85-85:EPS and Relative price strength rating is better than 85% its highly good.
1 - 99 pecrcent rating
B-B-B:Industry Relative price strength rating - sales+profit+return equity -

Accumulation distribution rating
"A" Best to "E" worst

SmartMoney.com - shows you the lead dog
Avg Volume: Average Daily Volume
Share outstanding??

beta - measure the volatilty relative to S&P(1.5 means 50% more)
PPG - price to earning to growth
open up the definitions if you dont answer in the website.

insider trading- legal stuff--shows you the buyer and sellers that are director.big stock move

play with real stocks.dont go for small penny.100$ buys alot of small

stocks.Price 15$-80$
pick the stock with an average volume of 1Million
average trading range:atleast 1$ movement but less that 8%
go to the industy you know about. so when you see the news you know whats going on.

to loose professionaly:
analyze, once you open a trade, only do risk management
be systematic, do not let your emotions change your trading behavior. follow plan and rules.

if there is a significant spread from the buying and selling(Buy:30 - Sell 35).
we sell short at 35 and buy at 30. we gain 5$. we should look at the number of stocks available also.


bid=buy
ask=offer=sell
Take the offer (lift the offer from ask) = Hit the Bid(selling to willing buyer)
demand=support=buyer=bid
supply=resistance=seller=ask

In Level 2
GO short if the number of sell is higher than buy
Go Long if the number of buyer is higher than seller

Look at the economy,then the market then the sector then the stock.
if economy is high, then market is good, and a sector will boom so the stocks should look good.

Know your tool and how to use it.(trading execution)
a float is whats left of the stock. big names always have floats. so you cant

short if the float is low.you cant short if your brokerage doesnt have inventory in a bull market things go down twice as much is it goes up. sell short in a bull market when its up incase it does down.

you can only short on an upstick waiting costs money.sell if you have stocks

10 laws of day trading:

Use Small Shares (dont take large risks until you build a buffer)
When in doubt, get out! (if it doesnt behave like expected, GET OUT)
Learn the difference between gambling and day trading (no overnites)
Dont add to losers(average UP, add to winning position)
dont overtrade (trade more only as you get experience and only if winning,not opposite)9-11.215-330/time
You must use stop loss points
Have a daily limit loss ( 1 to 2% risk capital) capital 25000$ = 250$-500$ limit
be logical not emotional ( control your temper)
dont trade if there are computer problems or slow quotes from the market
be disciplined (hearing is one thing,doing is something else)

OLD KOREAN TRADING PRINCIPLE
Dont lose money, if you do lose money, lose very little money