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Made Easy
Second Edition
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In an increasingly competitive world, it is quality
of thinking that gives an edge—an idea that opens new
doors, a technique that solves a problem, or an insight
that simply helps make sense of it all.
We work with leading authors in the various arenas
of business and finance to bring cutting-edge thinking
and best-learning practices to a global market.
It is our goal to create world-class print publications
and electronic products that give readers
knowledge and understanding that can then be
applied, whether studying or at work.
To find out more about our business
products, you can visit us at www.ft-ph.com.
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Made Easy
Second Edition
Your Guide to Profitable Trading
Guy Cohen
An imprint of Pearson Education
London ● New York ● Toronto ● Sydney ● Tokyo ● Singapore ● Hong Kong
Cape Town ● New Delhi ● Madrid ● Paris ● Amsterdam ● Munich ● Milan ● Stockholm
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Library of Congress Number: 2005923851
Vice President and Editor-in-Chief: Tim Moore
Executive Editor: Jim Boyd
Editorial Assistant: Susie Abraham
Development Editor: Russ Hall
Marketing Manager: John Pierce
International Marketing Manager: Tim Galligan
Cover Designer: Alan Clements
Managing Editor: Gina Kanouse
Senior Project Editor: Kristy Hart
Copy Editor: Chrissy Andry
Indexer: Lisa Stumpf
Interior Designer: Sue Lamble
Compositor: Major Productions
Manufacturing Buyer: Dan Uhrig
© 2005 by Pearson Education, Inc.
Publishing as Financial Times Prentice Hall
Upper Saddle River, New Jersey 07458
Financial Times Prentice Hall offers excellent discounts on this book when ordered in
quantity for bulk purchases or special sales. For more information, please contact U.S.
Corporate and Government Sales, 1-800-382-3419,
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v
FINANCIAL TIMES PRENTICE HALL BOOKS
For more information, please go to www.ft-ph.com
Business and Society
John Gantz and Jack B. Rochester
Pirates of the Digital Millennium: How the Intellectual Property Wars Damage Our
Personal Freedoms, Our Jobs, and the World Economy
Douglas K. Smith
On Value and Values: Thinking Differently About We in an Age of Me
Current Events
Alan Elsner
Gates of Injustice: The Crisis in America’s Prisons
John R. Talbott
Where America Went Wrong: And How to Regain Her Democratic Ideals
Economics
David Dranove
What’s Your Life Worth? Health Care Rationing…Who Lives? Who Dies?
Who Decides?
Entrepreneurship
Dr. Candida Brush, Dr. Nancy M. Carter, Dr. Elizabeth Gatewood,
Dr. Patricia G. Greene, and Dr. Myra M. Hart
Clearing the Hurdles: Women Building High Growth Businesses
Oren Fuerst and Uri Geiger
From Concept to Wall Street: A Complete Guide to Entrepreneurship
and Venture Capital
David Gladstone and Laura Gladstone
Venture Capital Handbook: An Entrepreneur’s Guide to Raising Venture Capital,
Revised and Updated
Thomas K. McKnight
Will It Fly? How to Know if Your New Business Idea Has Wings…
Before You Take the Leap
Stephen Spinelli, Jr., Robert M. Rosenberg, and Sue Birley
Franchising: Pathway to Wealth Creation
Executive Skills
Cyndi Maxey and Jill Bremer
It’s Your Move: Dealing Yourself the Best Cards in Life and Work
John Putzier
Weirdos in the Workplace
Finance
Aswath Damodaran
The Dark Side of Valuation: Valuing Old Tech, New Tech, and New
Economy Companies
Kenneth R. Ferris and Barbara S. Pécherot Petitt
Valuation: Avoiding the Winner’s Curse
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International Business and Globalization
John C. Edmunds
Brave New Wealthy World: Winning the Struggle for World Prosperity
Robert A. Isaak
The Globalization Gap: How the Rich Get Richer and the Poor Get Left
Further Behind
Johny K. Johansson
In Your Face: How American Marketing Excess Fuels Anti-Americanism
Peter Marber
Money Changes Everything: How Global Prosperity Is Reshaping Our Needs, Values,
and Lifestyles
Fernando Robles, Françoise Simon, and Jerry Haar
Winning Strategies for the New Latin Markets
Investments
Zvi Bodie and Michael J. Clowes
Worry-Free Investing: A Safe Approach to Achieving Your Lifetime Goals
Guy Cohen
The Bible of Options Strategies: The Definitive Guide for Practical Trading Strategies
Michael Covel
Trend Following: How Great Traders Make Millions in Up or Down Markets
Aswath Damodaran
Investment Fables: Exposing the Myths of “Can’t Miss” Investment Strategies
Harry Domash
Fire Your Stock Analyst! Analyzing Stocks on Your Own
David Gladstone and Laura Gladstone
Venture Capital Investing: The Complete Handbook for Investing in Businesses for
Outstanding Profits
D. Quinn Mills
Buy, Lie, and Sell High: How Investors Lost Out on Enron and the Internet Bubble
D. Quinn Mills
Wheel, Deal, and Steal: Deceptive Accounting, Deceitful CEOs, and Ineffective
Reforms
Michael J. Panzner
The New Laws of the Stock Market Jungle: An Insider’s Guide to Successful Investing
in a Changing World
H. David Sherman, S. David Young, and Harris Collingwood
Profits You Can Trust: Spotting & Surviving Accounting Landmines
Michael Thomsett
Stock Profits: Getting to the Core—New Fundamentals for a New Age
Leadership
Jim Despain and Jane Bodman Converse
And Dignity for All: Unlocking Greatness through Values-Based Leadership
Marshall Goldsmith, Cathy Greenberg, Alastair Robertson, and Maya Hu-Chan
Global Leadership: The Next Generation
Management
Rob Austin and Lee Devin
Artful Making: What Managers Need to Know About How Artists Work
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vii
J. Stewart Black and Hal B. Gregersen
Leading Strategic Change: Breaking Through the Brain Barrier
David M. Carter and Darren Rovell
On the Ball: What You Can Learn About Business from Sports Leaders
Charles J. Fombrun and Cees B.M. Van Riel
Fame and Fortune: How Successful Companies Build Winning Reputations
Amir Hartman
Ruthless Execution: What Business Leaders Do When Their Companies Hit the Wall
Harvey A. Hornstein
The Haves and the Have Nots: The Abuse of Power and Privilege in the Workplace…
and How to Control It
Kevin Kennedy and Mary Moore
Going the Distance: Why Some Companies Dominate and Others Fail
Steven R. Kursh
Minding the Corporate Checkbook: A Manager’s Guide to Executing Successful
Business Investments
Roy H. Lubit
Coping with Toxic Managers, Subordinates…and Other Difficult People
Fergus O’Connell
The Competitive Advantage of Common Sense: Using the Power You Already Have
Tom Osenton
The Death of Demand: The Search for Growth in a Saturated Global Economy
W. Alan Randolph and Barry Z. Posner
Checkered Flag Projects: 10 Rules for Creating and Managing Projects that Win,
Second Edition
Stephen P. Robbins
Decide & Conquer: Make Winning Decisions to Take Control of Your Life
Stephen P. Robbins
The Truth About Managing People…And Nothing but the Truth
Ronald Snee and Roger Hoerl
Leading Six Sigma: A Step-by-Step Guide Based on Experience with GE and Other
Six Sigma Companies
Susan E. Squires, Cynthia J. Smith, Lorna McDougall, and William R. Yeack
Inside Arthur Andersen: Shifting Values, Unexpected Consequences
Jerry Weissman
Presenting to Win: The Art of Telling Your Story
Marketing
David Arnold
The Mirage of Global Markets: How Globalizing Companies Can Succeed as
Markets Localize
Michael Basch
CustomerCulture: How FedEx and Other Great Companies Put the Customer First
Every Day
Jonathan Cagan and Craig M. Vogel
Creating Breakthrough Products: Innovation from Product Planning
to Program Approval
Lewis P. Carbone
Clued In: How To Keep Customers Coming Back Again And Again
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viii
Tom Osenton
Customer Share Marketing: How the World’s Great Marketers Unlock Profits
from Customer Loyalty
Bernd H. Schmitt, David L. Rogers, and Karen Vrotsos
There’s No Business That’s Not Show Business: Marketing in Today’s Experience
Culture
Yoram J. Wind and Vijay Mahajan, with Robert Gunther
Convergence Marketing: Strategies for Reaching the New Hybrid Consumer
Personal Finance
David Shapiro
Retirement Countdown: Take Action Now to Get the Life You Want
Steve Weisman
A Guide to Elder Planning: Everything You Need to Know to Protect Yourself Legally
and Financially
Strategy
Edward W. Davis and Robert E. Spekmam
The Extended Enterprise: Gaining Competitive Advantage through Collaborative
Supply Chains
Joel M. Shulman, With Thomas T. Stallkamp
Getting Bigger by Growing Smaller: A New Growth Model for Corporate America
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To Geoff, whose genius and contrarian outlook gave me
the stomach to perform one of his reasonable miracles.
