Chapter summary

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Ch1. Black Monday
Lessons Be persistent, study the game. Focus on today. Don't worry about yesterday. Educate yourself. The uneducated lose. Risk management must be my first priority. Learn from every trade. Critique yourself but stay in the present. Background info Black Monday was in October 19, 1987. All markets dropped drastically by 20 to 29%

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Equity = stocks commodities = pork belly   S&P Futures it's a new market in 1982 Down and Merrill were old at that point.   Focus on managing risk, taking profit it's second.   Once made 3,000 trades a day. Ended up with loss for not tracking commission fees associated with large volume trading.
Day trader: Doesn't hold large positions long term Doesn't hold futures contracts long term Doesn't leave positions unsupervised\ Ask yourself this question: Should I be long, short, or out of the market?    

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Short Selling: Investment strategy that speculates on the decline in a stock or other security prices. Must have a margin account with broker, include interest charge.   How it's the process? 1. Borrow a stock from broker 2. Sell it to open assuming stock will go up        The order type it's Sell to Open. That's the name for selling short. 3. Buying to Close is unwinding that position. Buying the stock later at a cheaper price, keep the difference, and sell stock back to broker.

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Ch2. Time is central
Lessons Patience pays. Trade during times of highest volatility and liquidity. Use 24 hr trading clock. Do not overtrade. Yearly opening number must use! TRADE ZONES for opportunities I   10:00am   -  11:15am II   1:30pm    -    2:15pm III  3:15pm    -    3:45pm High liquidity and high volatility  

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