Table Of Content
The Compleat
Day Trader
Trading Systems, Strategies, Timing Indicators,
and Analytical Methods
Jake Bernstein
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Contents
Preince ue
Adknoniedgments xi
sntroduetion
‘Tue Fort Bediod Laceased Vallhy 1
‘The Crmputer Revolution and Trading 2
Aavmnces i Sureet Quotation Spares, 3
The international an Permelic Palucal Backdrop 3
Uesponstoliios and Goals a Ine Day Trader 8
‘About hie Book
Beware of val Tales 5
Stho Succeeds and Who Fils Qualities for Success 5
‘Whit The Bool Gannoe md Wl Nat Door You &
No wsaggerated Clams 10
Povour Own Heasareh 40
Gating Started 14
‘Waid Lona vutures Trading 12
1. The Bastes
Definition of Terme 13,
2. Wht a Day Teader tx and Wust a Day Trader Doce
What Boos a Tg Tender Trude? 18
rr}
38
i contents
9. The Iluslon af System Testing
System Develapuscac 23,
Waariea trading System? 26
hats et? as
Muntcta Change—Market Porelyuste Change 20
Sirirg toe Sclutens 27
Freroke avril InteMgerce | 27
Tmplcations for the Futire 39
|. Day Trading with Moving Avcrages
Moriag average Basins 30
rauidona Movang Aveoye: Syonems: Assets and sbi,
Moning hverage CronemerePoce vraus MA
Moog Sowrogr ag Support aad Reselamen | $8
5. Intraday Application of Stockastioa
ng Slornsatios Quicely and Simply 49
“he baale Sider eestor 4
Basie apprenehes fo SUTrowag 43
Intraday Stochastic POF: Defonsion 47
Sharanucters 48
Markets in Which SP Works Well 52
Hicand Rio Trading Thing te SP 82
Yariaton om ie Thee el SP 8S
‘Whine Yon can Expect 5a
Prefered Workeieter SP Applicaton 55)
3. ape, Gaps, Gane
Uap Tending Rules and Detttans 58
Sie Observations aboot ihe Gap Technique 65
Get Some Eaperienee 70
Gop Sloe and Penetration Size 71
Witt Yeu Cau Realstealy Papert. 71
[New Last Word sbost Slop Ordre 72
. Support and Resistance: the "MAC"
the Moving average Chowne 74
How Supper! tnd Recmtance Doveop during the Day 78
Determining Ped, Suppate, and Reciamerce 74
‘racing yatboe ae Establiied rend 20
Ensting PonilonaTughe of Wang 80,
Stdniys Trea Teadiig —Treding within tbe Chanael 2
‘Aow Precautions and Suggestions 8
Sag cis Channel Technique si Ouser Methods 64
Enaaton of he MAC
‘Using Wilder's RSI for Day Tradiog
Decnyg be Pre Deriatte, 28
[Rates 2 Day Yeading oth the RSI 89
23,
30
87
©. Using Intraday Momentam
10, Rate of Change in Day Teading
12, Intraday Chimne! Breakout
ot tae Channel Breatiout System Works 108
12, Teaditione! Methade nf Techntest Analysis and Day Trading
‘Tend une Anaya 11
‘Tren Lite Appictlons—hart Formations, 115
19, A Unique Oselllator for Day Trading
pens verona Clones 123
‘Ehnecrucdon ofthe O/C Toe mtreday Taguig 128
14, Soniping the Markets
Way Sealping® 151
Rule forseaiing 132
‘Siugerted Methods of Sealping | 382
‘Buyin nto Large Declines or GeRing into Large Rales 130
18, Importance of Order
une You Should Xow abort Merket Orders LAL
Markcell-Toorve I te
Hicersamyron)Oraere 14S
‘Stop Orders 143
Slop Lunt Ordese 14
BiontTU-taneeied GTC) Orcers 144
Ope Canals the Deber (000) 144
Doing Ordere Your Atvanlage 14
16, How Seasonelity Affects Barnet
Defining Fry Seasonal Dares 148
How to ive tue Rey Seasonal Dave Teeneioa 19,
Bey Semen Tendencies 160
17, intraday Spread Trading
Prevehstins The Key to Prilabe Spread Dry Tracing 163,
Melons of Spresd Day Trading 10%
‘What You Ca Realitealy Expect 160
18, The Conncentive Closes System
Deftotinsind Signs 170
Bow te CU Syocean Opeentes 172
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130
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fer
16a
170
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Contents
10, Sentiment Reigne Supreme
Delning Seatinent 176
‘Rvaily Sentomen ex—ideal fr ShorL-Tesm Trading
‘Rill Hstoreel Overton 77
ADSL Day- Trading fppication 178
Sisualtmg Market Sonteoert Reladonstans 178
The impertonee of Market Seutunent 178
DStHisteriet Dats 185
20, Critical Time of Day (CTOP)
Basic CTON Sigialn nd Verametere 169.
pe and Seggeatine or Using CTO TBS
21. Putting tt aD Together
29, The Peyohology af Day Trading
A Sueeessink Pay Tratha Needs Dusipine 186
23, The Impact of 24-Hour Trading on Day Trading
24, Twenty Keys to Success
Day Trader
Appendte. Formulae
178
186
aor
197
207
an
220
Preface
Kor many years, fonzres traders have been fascinated with the idea of
day trading. Increased market volatility has created large intradsy price
swings which, in tum, have provided numerous epporrunities fer the
day trader
Tn addition 1o the increase in opportunities, the wide availabilty of
relatively low-priced computers and soffsare hag helped narrow the
‘gap between the professional day trader and the novice.
The bok you are about to evad contains many different methods of
day trading. Take the time to learn, study, and track the mnethosts. Then,
arler you have lestned the techniques you vant to use, begin trading, But
dont plunge in before you have spunt wore time learning, the methods.
(One last paint before you bugin your reading. Do nol believe for even
cone scwund that Jay trading fe wags. Day Umding may, i fact, he more
difficui than position trading, In the fal snalysiv day wading Is not the
proverbial “piece of cake” thats many traders seek. [t anyone tells yout
that yon can day trade your way to riches with little effort they're
wrong. Day ading lakes work, work, and more work. If you do the
work, you'll eeap the rewards, [ts thal simple and its that complicated,
Twish you success ia your venture, LL | can be of assistance, please cal
cor write me,
eke Berestein
Acknowledgments
| wish to extend a special word of thuiks tu Cummodity Quote Graphics
of Glenwood Springs, Calonadu, for permission to reprint charts from
theiz outstanding quotation, ‘graph:cs hardware and soltwrare program,
SYSTEM ONE. I have bean a COG customer for many years and tind
their services quttanding as well as especially useful for the purpose af
day trading.
Tam alsa imdebted to Mr, Bill Crnz of Omege Revearch in Misuni,
Hlorida, or inv assistance and permission to use reperts generated by
Jhis excelent analytical and testing sortware programs, TradeStalion ant
Systeeniriter, Both programs make the job of historical testing and
tain development enjoyable and efficient.
(Naturally, I owe considerable tanks to the many traders I've knows
Hhrough che years who have contributed ta my knowledge of Ue anar-
Ikels. You all nn wha you ave ve loarued from each and every one of
YoU, My list i far too lengthy fy include heze; however, | am thankful to
all who have touched my life with their upicions, suggestions, systerns,
‘methods, and timing indicators
My hard-working office staft must also 9¢ commended for their
efforts in the piodcsion of this hook. | am not casy tu work with. |
change my mind toa easily and too quickly although all \wrns out well
im the long run. Special thanks to Linda, Denise, and Rob. Patrick gebs
an extra note of thunks for editing ond pasting up the manuscript. And,
‘of course, thanks 49 Chis for his progratmening work.
