The Compleat Day Trader, Second Edition

by Bernstein, Jake

• ISBN13: 9780071663885
• ISBN10: 0071663886
• Edition: 2nd
• Format: Hardcover
• Copyright: 2011-01-03
• Publisher: McGraw Hill

Summary

The classic guide to day tradingupdated with tools and strategies designed specifically for today's volatile marketThe second edition ofThe Compleat Day Traderaddresses the major changes in day trading since the book's original publication, including new trading software, the influence of 24-hour markets, and, most important, dramatically increased volatility.In the clear and direct writing style he has become famous for, Jake Bernstein reveals the ins and outs of day trading. He steers you away from the practice of trading based on random events and toward the more successful practice of trading based on predictable patterns.The Compleat Day Traderprovides a comprehensive overview and foundation on: The basics of trading Analytical tools and techniques Ways for moving averages to momentum Influences of market sentiment and trader psychology Tips for avoiding common pitfalls

Author Biography

Author Profile
Jake Bernstein is president of MBH Commodity Advisors, Inc., and Bernstein Investments, Inc. He has authored more than 40 books on trading, investing, investor psychology, and economic forecasting. Bernstein has developed a number of trading systems, as including the Setup-Trigger-and-Follow Through (STF) trading model, which has been adopted by traders throughout the world. He is publisher of several investing newsletters, and his clients include some of the largest hedge funds, brokerage firms, market analysts, banks, and professional traders in the world.

Table of Contents

Preface
Acknowledgments
1. Where We Have Been and Where We Are Going
What Follows
The Forces and Factors behind Record-Breaking Volatility
The Electronic Revolution and Trading
Day Trading Is More Viable than Ever
2. The Basics: Definitions, Tools, and Considerations
Does a Day Trader Trade “Anything That Moves”?
Why Day-Trade?
What You Will Need
3. The Trading Model: Setup, Trigger, and Follow-Through
Market Structure
A Closer Look at the STF Structure
Conclusion
4. Trading System Development and Testing
System Development
What Is a Trading System?
Taking a Random Walk
What’s Left?
Markets Change; Market Participants Change
Striving for Solutions
The Role of Artificial Intelligence
Implications for the Future
5. Day Trading with Moving Averages
Moving Average Basics
Traditional Moving Systems: Assets and Liabilities
The Final Analysis
6. Day Trading with Support and Resistance: The Moving Average Channel
Overview of the Moving Average Channel
Step-by-Step Procedures for Day Trading with My MAC
Opportunities: Conservative and Aggressive
Profit-Maximizing Strategies with the MAC Method
A Few Precautions and Suggestions
Is the MAC Totally Objective?
Using the Channel Technique with Other Methods
Evaluation of the MAC
7. The Media Day Trade
A Typical Media Day Trade Scenario
Typical Behavior
Procedure for Making Media Day Trade
A Closer Look at Exit Strategies
8. Day Trading with Momentum and MACD
What Is Momentum?
What Momentum Can Do for You
General Characteristics of Momentum
Momentum Divergence
Momentum Is a Leading Indicator
Momentum Timing: Signals
Identification of Momentum Buy Signals
Choosing the Sell Point after Bearish Momentum Divergence
Moving Average Convergence-Divergence as Trigger
Stop Loss and Profit-Maximizing Strategy
9. Day Trading with Gaps
Opening Gaps
Frequency of Opening Gaps
Gap Open Signals
Observations about Gap Day-Trade Rules
Psychology of the Gap Higher Opening and Sell Trade
Stop Losses and Follow-Up Stop Losses on Gap Trades
Alternate Gap Trade Exit Method
Delayed Gap Open Signals
Some Observations about the Gap Technique
Overview of Effective Rules and Procedures for Gap Trades
Get Some Experience
Gap Size and Penetration Size
What You Can Realistically Expect from Gap Trading
A Few Last Words about Stop Orders
Takeaway Points
10. Using the Eight Open, Eight Close Method
How the Eight Open, Eight Close Method Works
Another Application of the Eight OC Method
11. Profit-Maximizing Strategies
The Importance of Sufficiently Large Stop Losses
Increasing Profits through Position Size Management
Trade Management through Equity Filter Application
Some Salient Points
The Danger Zone Concept
Using a Moving Average as a Tailing Stop
Gap Trade Profit-Maximizing Strategies
Conclusions and Summary of Profit-Maximizing Strategies
12. The Psychology of Day Trading
Discipline: The Essential Ingredient
Persistence
Willingness to Accept Losses
The Ability to Avoid Overtrading
The Ability to Specialize
What Should the New Day Trader Trade?
Beginning with Sufficient Capital
The Ability to Use News to Your Advantage
Taking Advantage of Brief Price Surges
Sticking to Your Daily Goal
Using Market Sentiment to Find Day Trades
Conclusions
13. Losing Mistakes and Winning Behaviors
Losing Mistakes
Winning Behaviors
14. Putting It All Together
Organization
Concluding Remarks
Index