Financial Freedom Through Electronic Day Trading / Edition 1

by Van K. Tharp, Brian June

Overview

An increasing number of investors are entering the high-risk world of electronic day trading—often before they’ve learned the basic principles and safeguards. Financial Freedom Through Electronic Day Trading combines Van Tharp’s mastery of trading psychology with Brian June’s nuts-and-bolts expertise to give day traders the proven strategies and information they need to survive and succeed.

From little-known day trading entries and exits to techniques that foster winning attitudes and styles, these practical ideas will help readers develop their own personalized trading systems. The perfect combination of psychological preparation and hands-on practice, it discusses:
*Market analysis from a day trading perspective
*Techniques for determining a market maker’s position
*The best day trading software

Product Details

ISBN-13:	9780071362955
Publisher:	McGraw Hill LLC
Publication date:	12/18/2000
Pages:	388
Product dimensions:	6.70(w) x 9.60(h) x 1.32(d)

About the Author

Van K. Tharp, Ph.D., is president of the International Institute of Trading Mastery (IITM) and has been a consultant to traders and investors for over 15 years. Internationally recognized as today's number one coach and trainer for traders, Dr. Tharp is the author of Trade Your Way to Financial Freedom as well as a five-volume home study course, a monthly newsletter on systems and psychology, and a number of articles in industry publications. His trading models and techniques were featured in the book Market Wizards: Interviews with Great Traders.

Brian June moved directly from a successful corporate career into a sizable income as an electronic day trader. A popular speaker at day trading seminars and expositions, June has written numerous articles for Market Mastery, the IITM newsletter, and is an expert at applying sound business principles to achieve trading success. He also developed a popular workshop on electronic day trading tactics and strategies.

Brian June (Grand Blac, MI) is a professional day trader, and has written for IITM's newsletter Market Mastery.

Table of Contents

	Foreword	xi
	Preface	xv
	Acknowledgments	xxi
Part 1	How to Develop a "Laser-Guided Rocket" to Trading Success	1
Chapter 1	The Journey to Trading Mastery	3
	The Mind of a Master Trader	3
	Is a Master Trader inside You?	12
	The Most Important Steps to Trading Mastery	13
	Knowledge Keys	17
Chapter 2	Prepare Yourself for Trading Heights	19
	The Power of Commitment	19
	The Truth inside You	22
	The Mission You Must Accomplish	23
	I'm Starting with the Man in the Mirror	26
	The Most Powerful Trading Questions You Could Ever Ask	27
	The Belief Dynamic	29
	If You Don't Believe It, You Can't Trade It	29
	To Get Clear on Your Goals, Link Your Beliefs to Your Mission	31
	Turn Your Goals into Action	34
	How to Develop Powerful, Action-Oriented Goals	36
	The Most Critical Goal-Setting Secret	38
	Knowledge Keys	39
	Calls to Action	39
	Notes	40
Chapter 3	Design a Plan Even Goldman Sachs Might Envy	41
	How to Create a Dynamite Plan	43
	Stepping through Your Own Business Plan	44
	Show Me the Money or Why Have a Trading Plan?	54
	Make an Inventory of Your Market and Trading Beliefs	55
	Ya Gotta Have an Edge	57
	Choose Your Trading Styles and Time Frames	58
	Does Size Really Matter?	66
	The More Tools the Merrier	68
	Final Countdown	69
	Effectively Marshaling Your Resources	80
	Sample Business Plan	85
	Sample Trading Plan	91
	Knowledge Keys	96
	Calls to Action	96
	Notes	97
Part 2	Putting the "Laser-Guided Rocket" Together	99
Chapter 4	The Trader's Toolkit: Essential Secrets for Getting the Most from Your Hardware and Software	101
	How Much Computer Do You Need?	102
	Sweat the Small Stuff	103
	Internet Connectivity--Get a Big (Broadband) Pipe!	106
	Where Can You Rent That Big Pipe?	109
	Keep That Connection Connected!	111
	Technology Risks--The Dirty Little Secret of Trading	112
	Integrated Trading Software--The Heart of Your Trading Platform	113
	Reading the Gauges--The Most Important Trading Screens	115
	Knowledge Keys	131
	Calls to Action	131
Chapter 5	Understanding the Golden Rule of Trading--R Multiples and Expectancy	133
	The Golden Rule of Trading--Cut Your Losses Short and Let Your Profits Run!	134
	Knowing Your Initial Risk: Begin with the End in Mind	135
	Knowing the Expectancy of Your System--Will This Dog Hunt? Or What Kind of Return Can You Expect for Your Risk?	138
	Defining and Calculating Expectancy (Relax, the Math's Easy)	138
	The Opportunity Factor	148
	Knowledge Keys	149
	Calls to Action	149
	Notes	150
Chapter 6	Position Sizing: The Key That Makes It All Work for You	151
	Positioning-Sizing Techniques That Work	155
	Simulating Your System to Determine What's Possible	158
	Position-Sizing Mistakes You Must Avoid	160
	Answers to the Position-Sizing Problems	163
	Knowledge Keys	164
	Calls to Action	165
	Notes	165
Chapter 7	Prelaunch Preparation--Your Daily Routine	167
	The Power of Simplicity	167
	Start Your Day the Evening Before	168
	T Minus 2 Hours and Counting	169
	Applied Behavioral Finance--Know Thyself	171
	Knowledge Keys	175
	Calls to Action	176
	Notes	176
Part 3	Launching Your Trading Rocket	177
Chapter 8	The Trading Day Liftoff: Navigating Trade by Trade	179
	NASDAQ Level II--Your Booster Rocket to Trading Orbit	179
	The Supply and Demand Model	180
	The Ax	181
	Other Market Makers Know the Ax	184
	To Save Your Ask, Find the Ax!	184
	Who's Playing Poker?	186
	Chippies on the Bid--What Does It Mean?	188
	The Secret of Collapsing Tiers	189
	Understanding ECNs and Order Routing-- Getting Filled When It Counts!	193
	Execution Strategies--When to Use Each Route	203
	Some Finals Words on Order Routing	205
	How to Get Filled in a Fast Market: He Who Hesitates Is Lost	205
	The Mystery of Hidden and Reserve Orders	207
	ARCA Reserve Orders	209
	Speaking of Edges	211
	Develop Expectations for Your Trading Day	211
	The Art of Interpreting News	213
	Stock Selection at a Glance	217
	Directional Bias	218
	Deciding to Enter	221
	Pulling the Trigger	222
	The Weight of Your Decision	222
	Getting Your Fill	224
	Never Enter a Trade Without Knowing Your Stop!	224
	A Secret for Keeping Your Stop	225
	Profit-Taking Exits	226
	Don't Forget to Reenter	230
	Position Sizing	230
	To Make Maximum Profits, Remain Flexible	230
	Defending Against Whipsaw	231
	Trading Day Quick View	232
	Knowledge Keys	232
	Calls to Action	234
	Notes	235
Chapter 9	Market-Making Strategies	237
	You Can't Trade What You Don't Believe	238
	Strategies and Tactics	238
	Market Making--The Stealth Specialist	240
	Profit Potential	246
	NASDAQ Market-Making System	249
	Price and Trading Levels	250
	The Ax Revisited	252
	Understanding the Market Makers	253
	Differences between Market Makers and Specialists	254
	Recapping Market Makers and Specialists	255
	Market Making--The Channel Feeder	255
	Knowledge Keys	263
	Calls to Action	267
	Notes	267
Chapter 10	Momentum Strategies	269
	Momentum Philosophy	269
	Momentum Patterns	271
	Market Makers during the Open	275
	Market-Maker Manipulation	277
	Detecting Market-Maker Manipulation	279
	Possible Interpretations of the MM's Activities	279
	Illustration of Fading the Trend	282
	Key Momentum Concepts	288
	Momentum Strategies--The Sonic Boom Dive	291
	Knowledge Keys	307
	Calls to Action	307
Part 4	Feedback and Maintenance	309
Chapter 11	Common Mistakes Everyone Makes--And How You Can Avoid Them	311
	Knowledge Keys	335
	Calls to Action	335
	Notes	335
Chapter 12	Getting Feedback and Refining the Process	337
	Review Your Trades: Live and Learn	338
	Debriefing the Trades: Rules Are Not Made to Be Broken	340
	Correcting Mistakes on the Spot: Do It Now or Forget It Later	343
	Take the 30,000-Foot View for Loftier Profits	344
	Refining the Process: If It Ain't Broke, Fix It (a Little) Anyway	346
	Knowledge Keys	348
	Calls to Action	349
	Notes	350
Chapter 13	Peak Performance Trading--The Keys to Gaining Control of Your Trading	351
	Commitment to Yourself and Trading	354
	Psychological Awareness (Soul-Searching)	354
	Overcoming Psychological Biases	357
	Emotions and Trading	360
	Knowing and Stating What Fits You	362
	Knowing Your Objectives and Using Position Sizing to Meet Those Objectives	364
	Rules and Knowing What to Expect from Your System	366
	How to Correct Mistakes	367
	Checklist for Peak Performance Trading	369
	Knowledge Keys	370
	Notes	371
	Glossary	373
	Bibliography	381
	Index	383