Table Of ContentTRADING
The Complete
UndergroundTrader System
For Timing & Profiting in All Financial Markets
Jea Yu
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TENNIS. SFE SHEED STDS (aardoner Ih pa)
ISBN-I0: 998803009 fandcowe sae pape, Friement ale & Tern masgemest 2
Escetnent, EB,
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"Joa Yostate book sa reth of ech in chore ful of ape reding gem un
oe wate ting strtegin that actualy make rooney. His race fous on mastering
‘ody tough mane wil beiptadew at al expecence ew"
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ae voited in purpose wil be vetorioun’ By bringing together the specif ang nate
‘wis Bi playbook meio, ceed chapters or. ow > prepere pretopclland emotionally
{sc uading, and Yuh ects on see caneol thong 2 Cir wl be aeronrce you wil eo
aod ove: agin Inston iris fun to ead?
Steve Noa. Prsdeor wmircancedharasoei
“he vry Lae to eve eandlestica toe Werte odd
Author uf apunee Cards Cotng Tuer
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‘What a grect book ene thing the Jen empbasiand was che fee aed o have thc ilu aod
pai, get 2 kaon wher it elie ore te have a beat dow rom the mathe both mental xd
“See hoe ha lem co lose cad fel the aia wil be bese pepurd Se acces shave said
for jears-pour sucess be based on you: lity to lean tobe 3 goed Iner and acept pan:
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‘his bone el tha ese praing devo them at some point anothee™
(Chadd Testing, Owner sod Presideat
Cobra Tiaing. Inc
seworcnbrenading com
THIS BOOK IS DEDICATED TO:
iy princous, KATANA LUCIA YU,
ro brawght rbvaney, bbs, art, aft salvation toy Me,
‘My quoenbae, BENITA,
for her uishakeabte resolve, love, and ft,
My brathar KEVIN,
wha showed ma the essence of rather,
‘oyaty, and compeasion
My mom, DUCK,
Ina stongest most ovr, and porsistont
rmetior on the pant, to
My other mom, MRS. VILLARI,
Jor believing in me fon: the beginning,
My sista, AULIAY aed her beaut ary,
far thet oving suppart and care
My brother and sisterinsiew, BILL AND LINDA,
for being a warra and supportive sanctuary,
‘My fo003, JOHN BOYER,
forthe wit of redemetizn,
id es, but not bast, my good Oude PAIN,
{or lving ma clay and enough mala to
camplote the legacy... and always sticking around. da!
CONTENTS
INTRODUCTION i
PART 1
ACQUIRING THE EDGE BY STARTING AT THE END 1
CHAPTER 1: Seating with Talore 3
CHAPTER 2 What i the “Rage? 2
CHAPTER 3: Murlers Over Mechodks 53
CHAPTER 4 ‘Tung Tien off rom Trading 8
PART 2:
THE COMPLETE TRADING SYSTEM FULL CIRCLE 7
CHAPTER 5:‘The "Tools a
‘CHAPTER 6; Proper Allocation of Shares 127
‘CHAPTER 7: Preparation Will Save Your (Trading) fe 135
TRIQING FULCROE
CHAPTER 8: Resi taining
CHAPTER: Quick Fundamental Analysis
CHAPTER 10; Usifzing Options for Leverage and I edging
CHAPTER f:'Ihe Paybook
CHAPTER 12: Sisvation Trades
CONCLUSION AND PARTING GIFTS OF WISDUMB,
APPENDIXA
BY SURI DUDDELLA OF SURINOTES COM
‘Harmonic Patten Te
APPENDIX B
BY ALEX WASILEWSKI OF PURETICK.COM
Ualizing 'higgers and Files ‘or Profitable E~Minis Trading
APPENDIX C
BY MARK JOHNSON OF UNDERGROUNDTRADER. COM
‘Maddog’ Liedes
ABOUT JEA YU
GLOSSARY
INDEX
251
281
295
297
307
INTRODUCTION
This book was ten years (and ten thousand spr) in the making. Ten "The pupae off is
é to find happiness in the
yee, thousands o€ hours in the wares, thousands of traders coming,
and going worldwide, Exereme highs und stunk lows. Fast women, Sot tvha
fast cus... naps. Weng movie
Te been in the crevice and com hole of every market paradigm
shift aknost every single day vince January 1, 1999, when Under
groundTiadsscom offically opened its daors. The reception wis
aveewihelmiag and ground shaking. The wurlers were recavesing
Fron the Pale: Rin ers we Greenpen went on 4 monster rate
ext carpaiga shat Fueled the Nasdag to 3,000 and gent the Incernet
companies proabole. Those were great times. Stocks were trading in
frusions, asl with only sight price increments beraeer the dol-
lars, instead of the 100 levels in pennies now. Broadcom (BRCM)
vas trading in he $200, JDS Uniphare (JDSU) in she $260, Cia
(CSCO} in fhe $905, FRAY in the $3005, wnd YHOO ramped up
through 6300, driving up the Tmremet and TPO mania, It was com
rman nace stock move up 850 ir-a day. NetBank (NTBK) popped
S100 one day. FntmeMed (ENMD) single digit tock gapped to $70
RAGING FULL CIRCLE
after a halt, and LEmalex (11) tanked dom the $120s to 820s in 15
sminates before halting in the high $30s to re-open $100 higher duc to
a false press release, [t was the wild, wild, and wilder west. Lock, there
‘were still ax market maker: back in the day. My first book, The Under-
grote racer com Guide ta Eletronic Trading: Day Trading Tecriqucs of
“Master Guerilla Trader, debuced well ia the Amazon.com top 100 list.
Day trading was white hot.’the money came fase and heavy. Life was
ood—too good—to last.
-As many rate curs as Crconspan implemented to stir up the eronoary, he
hiked them back up just as much—I belicwe he made 11 sate hikes—
‘while cryptically spouting “isational exuberance” to send the markets
cratering. “Thar’s like the boy wao led everyone inco the movie theatre
only t Highta match ond yell fic.
Imagine warching a show in a crowded movie theater on z Sacusday night,
‘Also imagine tat you are wanted by the FBL, who has just suerounded
both exits our of the theatre, waiting for you to come out, as there is ao
cubes escape route, Wt would you do inthis situation to eseape® Light
‘your popeorn and yell fe! This would cause a hysteric panic situation
‘nat would overwhelm the KIEL agents as chey get trampled by the mob
‘ying to escupe alive. Thats exarly whac happened co the markets—a
peste situation
Nasdaq lost over 8086 ofF ins highs. YHOO, which traded in the 83005,
tanked as low u: $8. [PO paper billionaires who exercised some cheap
options, anticipating their stocks’ recovery, were fadely awakened when
the TRS came: mocking, locking for their cut despite the stocks losing,
90% of thelr value. The bear sarket hit with devastating force. People
who thought they were day traders weer exposed for bagholdes. Biy
traders who stacked the bids with 850,000 hlocks to squeeve out the
shorts sezted getting filed and subsequently maseucred T knew a Kid
‘who rumed $30,000 to 42 million daring the Internet mania, only to
blow out in tes than two mantha after the stat of the ear marker
"Ihe bear masket wasnt too shabby for che traders who actually used
charts, Iwas jost as lnctive om thc downside on the backs of the hob
byists, What sillod cae traders and market makers was decimaliztion.
“Whe stupid penny ineroments added 100 priec intervals in beewoen dollar
price fovels, Market makers were being squeezed out on margins, and day
mreaueTion
sraders were raking much less. The peniay incrementa were che stupidest
deg ever. Who cares fran and poy can read a plex quote withort hase
ing to figure out the fractions? What good is the “liquidity” whem their
stocks ae losing over 7034 of their value? The exchenges were the only
‘ones to bene, with their yohune based fees.
Ever the andecipherable, monotone, laggurt! eno! that he was, Greenspan
cut xe in a ary spawning a housing buble, end in eect, taling ns oat
oteano, We kaw what hap-
pened with thar bubble, Flow many Ted chairmen san claire twa raussive
of the ying pan and invo the mouth of fr
ceonornic buibles daring their reign?
With the double whammy of the bear cles and desimalization, day
traders disappeased like the dinosaurs as did nurnerons market making
fers. The ECNs took reign, notably ARCA, STD, and INCA. Then,
9/11 happened when markets were alecady weak The war in Afghanistan,
ickod offa marke: sally that nearly dovialed the Dow: TTedge funds be
came the hottest worst kept scerct, making the rich sicher, especially the
big brokers catering to chese leviathans through their prime broker ser-
vices. Program trading volumes skyrocketed 2s black box, gray bex, and.
algorithm trading grabbed chunks of liquidity. Dark pools have gotten
lage, dealing only with institucional clicntcle. Goldman Sachs is snak-
ing billions with Casis black box programs capturing spreads, liqudicy,
and Eash quotes. What about the balanced playing ficld and transpar-
encs? Never
"The yune is ty Sind transpareuny before it becomes tov transpasext Lim
it exposing your llaws while tying to cxplote dhe marker’
Everything ia dhis book is fis-hand knowledge, evealed asa sevle of
houses UThours oF market participation IF anything, t will sve you
the ten year T spent & complete the tcing system. I have found dhut
rity in and of fuel deterrunes value. Demand usally follows, Build
itand hold out long enoughh—and they will come. Every thought snd
‘woxd in this book lis beea meticlously hindeaufted through blood,
sswext tess, and broken keyboards. .
Its the culrninution of joumey and all ts lessons. As mach us this bole
is shout the markets, it goes touch deeper. Tt stared with the warts
ane! manifested int life epiphanies. You mesn the markets are coreluted
‘TRADING FUL ORS.E
‘with life? Believe me, it's une, is true! ‘That is what the journcy is about,
‘inding the trth, tasting the essence, and bathing in the enlightenment.
©
So let's get started,
