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Purchase Benefits
What is included with this book?
Praise for Way of the Trade + Online Video Course
"Jea Yu's Way of the Trade offers serious traders a comprehensive and compelling approach to short-term trading. Jea writes in a reader-friendly style, connecting market realities with sound trading techniques and risk management strategies. If you are dedicated to succeeding in the trading world, Way of the Trade belongs on your bookshelf." Toni Turner, President, TrendStar Trading Group, Inc.; author of A Beginner's Guide to Day Trading Online and Invest to Win: Earn and Keep Profits in Bull and Bear Markets with the GainsMaster Approach
"In his new book, Way of the Trade, Jea Yu does a great job explaining market truths and delivering the tools helpful for profitable trading. There is so much valuable information in this book, but the section on 'The 5 Laws of the Marketplace' alone is worth the price of this book. A must-read for the serious trader!" Bennett A. McDowell, President, TradersCoach.com, and author of The ART® of Trading, A Trader's Money Management System, and Survival Guide for Traders
"Jea Yu's powerful new book offers a wide range of tools, strategies, and insights to help traders at all experience levels. Combining his unique market methodology with high-powered tape reading techniques, Yu's well-written narrative presents serious-minded readers with a detailed road map to short-term profits." Alan Farley, Editor/Publisher, Hard Right Edge "Jea is like the Kevin Smith of trading. His knowledge and historical perspective are rivaled only by his passion for the business. From X-Men comics to Bloomberg stock pickers, Jea takes you on a journey through the culture and mind of a Wall Street trader." Jeremy Frommer, CEO, Jerrick Ventures; former CEO of Carlin Financial Group; former Head of Global Prime Services, Royal Bank of Canada
"Jea Yu's latest masterpiece, Way of the Trade, illuminates a path of trading success appropriate for new hopeful traders and veterans alike. Way of the Trade encapsulates the strategic wisdom of Sun Tzu with the modern street smarts of a market master. Skillful use of trading examples, along with lessons of individuals who beat seemingly impregnable odds, make Way of the Trade incredibly difficult to put down and impossible not to learn from." Robert Weinstein, TheStreet.com contributor, founder of Paid2Trade.com, and full-time trader
JEA YU is a cofounder of UndergroundTrader.com, an interactive training site for traders, fund managers, and investors, which was voted Best of the Web by Forbes magazine for four consecutive years. A popular public speaker, Yu has been quoted in USA Today, the Wall Street Journal, and the Financial Times and is also a contributing writer for TradingMarkets.com and Benzinga.com.
Preface
Acknowledgments
About the Author
Chapter 1: The Mutation
The Phantom Menace
1996-1997: Pacific Rim Crisis;Scourge of the Specialist, Rise of the Daytrading
1998-2000: Rise of the Daytrader; Internet Bubble, Irrational Exuberance
2000-2003: Death of Daytrading; Internet Bubble Burst, Nasdaq Collapse, Bear Market Armageddon
2004-2007: Rise of the Bull Market and Housing Bubble
2008-2010: Real Estate Bubble Collapse, Global Financial Crisis;Stock Market Plunge
2010-2012: Market Recovery, European Crisis, Rise of the Algos and Dark Pools
2009-2012: Rise of the Algorithm (Algos) High Frequency Trading (HFT) Programs; Dark Pools and the Infamous Kill Switch
Typical HFT ‘Sheep Skinning’ Cycle in 2009-2012
Algo/HFTs in 2012 and Beyond
2012 and Beyond: Hybridization of Participants
Enter the Thunder and Tumbleweeds Market Trading Landscape
Defining Market Landscapes, Climates, and Terrains
Landscape
Climate
Dry Climates
Wet Climates
Terrain
Seasonal Macro Climates
The 5 Laws of the Marketplace
Law of Reciprocity
Law of Linearity
Law of Foreshadowing
Law of Convergence
Law of Transparency
The Profit By-Product
The Model of Excellence: Shokunin
The Excellent State of Excellence
Earnings Seasons: The Super Bowl of Momentum
Immediate Crisis Panic Landscapes
Global Influences: Europe, China, and the World
Market Sector Tier System Mechanics
Sector ETFs as Indicators
Bearish Leveraged ETFs
Breadth Indicators
Chapter 2: The Hybrid Market Predator
The Hybrid Market Predator
Relevant Traits of the Three Skillsets
Kurt Warner: Adversity Conditioning Model
Pockets, Pockets, Pockets
Properly Aligning Your Personal Perspective
Manifesting By-Product into a Product
The House of Enlightenment: www.UndergroundTrader.com
The Passive/Assertive Portfolio Player: www.UndergroundSwingTrades.com
The 90-Minute Trading Day: Morning Profit Maker: www.MarketFy.com
The 8 Step Process to Turn Idea into Profit
Chapter 3: The Morning Ritual
Hunting for Prey: Headliners and Corganic
The Gapper/Dumper Three Reaction Sequence
Ritual Religion
Wasted Effort
The Real Work, Don’t Skimp!
Law of Reciprocity Revisited
FAST (Fast and Simply Thorough) Chart Analysis
Step-by-Step Ritual Routine by Time
From 8am-9am EST
Evaluate the Climate
Chapter 4: The UndergroundTrader Trading System: The Katana
Recommended Online Direct Access Broker: Cobratrading.com
Configuring the Rifle Charts
The Role of the Bumpers: Moving Average Breakouts, Breakdowns, and Trends
The Four Parts of Trends: Consolidation-> Break-> Peak-> Exhaustion
The Role of the Bumpers: Bollinger Bands
The Slope Effect
The Weekly and Monthly Moving Averages and Bollinger Bands
The Role of the Stochastics
Spotting and Trading Fades
The Two Most Important Price Patterns: Pups and Mini Pups
The Pup Breakout Pattern
The Inverse Pup Breakdown Pattern
The Mini Pup Breakout Pattern
The Counter Candle(s) Trigger
The Mini Inverse Pup Breakdown Pattern
Stairstep Mini Pups
Pretzel Mini Pups
Mini Pup Reversal Fades to Channel Tightenings
Combination Pup and Mini Pup Pattern
Stinky 2.50 and 5 Level Defacto Price Bumpers
The (Only) Three Candlesticks I Use
Massive Volume Spikes
Mischievous Mis-tick Manipulation
The Essence of Stops
Less is More Applies More than Ever
STOPS and SPRAWLS
OPS: Offensive Pare Scaling
Slow Steady Grinds: Stop Out
Excessive Slow Grinds: How and When to Short
Early and Mid-Stage Perfect Storms
Red-line-ing Beyond Comfort Zone Threshold
Three Levels of Stop Mindset
What to Do After a Disaster
The 3 Steps for Proper Re-Setting
Step 1: Be the Hammer Candle
Step 2: Be the CSI (Crime Scene Investigator)
Rogue Waves
Self-Imposed Error
Step 3: Take The Prescription
Purposely Add More Stocks to Watchlist and Minders
Step-by-Step Healing and Recovery
The Unconditional 3 STOP Rule
DSS: Defensive Sprawl Scaling
DSS Rules and Checklist
Chapter 5: The Perfect Storm Pattern Trade
What is a Perfect Storm?
Basic Formation
Perfect Storm Profile
The Three Stages of Perfect Storm : Dormant to Detonation
The Three Perfect Storm Outcomes
Spotting Perfect Storm Opportunities with the Anchor Time Frame
The PS Code
Safety
Volume Hungry
Determining the Boss Time Frame Chart:
The Basic Method of Playing Perfect Storms
How to Trade the Three TYPES of Perfect Storms
The Trending
How to Play Trending Perfect Storms
Trading the Sympathy/Laggard Perfect Storm
The Tightening
Tightening Reversals
How to Play Tightening Perfect Storms
The Consolidation Break
How to Play Consolidation Break Perfect Storms
Repeating Nature of Perfect Storms:
Double H-Edged Sword Sequence Trade:
How to Execute DHSS Trades
Chapter 6: Optimized Four Leveled Research Process
Level 1 Research Process: Spot Technical Analysis and Headline Search
Step 1: F.A.S.T. Chart analysis (requires rifle charts)
Step 2: Headline search
Level 2 Research Process: Digging Deeper into Fundamentals
Step 1: Gather and Screen Financial Statistics
Step 2: Check for insider buying or selling
Step 3: News and Analyst Scan
Step 4: Mark any unfilled gaps on the daily chart for past 6-9 months.
Step 5: Add Fibonacci retracement levels on daily charts
Step 6: Quick Peer Check
Level 3 Research Process: Mining Perspectives
Step 1: Gauge the Sector and Peers
Step 2: Read Articles and Message Boards
Step 3: Check for any upcoming catalysts
Step 4: Check Options Activity
Level 4 Research Process: The Juicer: Full Immersion
Step 1: Read latest 10-Q and 8-K Results of Financial Operations and Conditions report
Step 2: Review latest conference call transcript
Step 3: Find the Sexy
Step 4: Process the Juice
The Afterglow Effect
Chapter 7: How to Prey for Playable Stocks to Trade
Stocks Are Battlegrounds and Participants Prey
Playability: Internal and External Factors
Internal Playability: Familiarity + Comfort Level
Internal Factor: Comfort Level
The Danger of Fixed Dollar Allocation
Familiarization Process
External Playability: Correlation + Catalyst
Catalyst
Sector Correlations
The Two Types of Playable Stocks: Headliners and Corganic
Headliners: Gappers and Dumpers
Most Significant News Situations
Corganic Stocks: Core Vehicles and Post Headliners
Where to Find Playable Stocks: Sources for Ideas
Newsfeeds
Scanners and Screeners
Stock Research
Financial Television Channels
Chapter 8: Stalking Prey
Aging: Waiting For the Pattern to Form
Stalking: Setting an Alerts Minder on Your Trading Platform
Chapter 9: The Encounter from Start to Finish
Anxiety: Bad versus Good
React, Don’t Panic
Distinguishing Trade Entry Stages: Early, Impact, Late
General Rules for Entry Stages:
Scaling Requires Per Share Pricing
The Complete Trade Sequence
Pre-Trade Process: Information Gathering and Analysis
Trade Execution Process: Entering the Position
Trade Management Process: Monitoring and Exiting the Position
Identifying Maladies in Your Trading
Malady: Made a profit, but left too much on the table!
Malady: I stepped in too early and got stopped out before the bounce! I lost money and got slapped afterwards! Grrr.
Malady: Market is just chopping me! Made some profits off the open but giving it back now and getting chopped. Everything I touch backfires on me!
Malady: I’m getting chopped out constantly on my trades. Stock will move up a little but then sell off and stop me right out.
Malady: I played a perfect storm breakout this morning for nice profits but got chopped out twice on the same set-up in the midday. Then it took off when I finally decided not to play it again! I feel like a sucker, the market chopped me twice and then broke out when I wasn’t in ?!?!
Post Trade Sequence Analysis
Reconstruct the Trade and Conditions Accurately
Summary
Chapter 10: Portfolio Trading: The Skill Set of the Evolved Hybrid Market Predator
Market Calibrated Portfolio Creation and Management
General Capital Allocation
Activity Allocation = General Capital Allocation
Risk Adverse Nature of Intra-Day Trading
Her Majesty, Queen Leverage
Application of Well-Managed Allocation Management
truTV ‘It’s Bot Reality. Actuality’
Constructing the Portfolio
General Macro Market Analysis and Allocation Assessment
Qualifying the Three Types of Trade Considerations
Daytrading Considerations
Intra-Day Trade Profiles
SCALP Trade
Case Study: RIMM short scalp on perfect storm breakdowns
Case Study: RIMM long scalp on perfect storm breakout
RANGE Trade
Case Study: MGAM Range trade long on breakout
Position Trade Profiles
Adjusting Position Allocation Percentages
SWING Trade
Case Study: UA Jan 45 Call options Swing Trade
CORE Trade
Case Study: APP Swing trade to Core Long Term position trade
Active Portfolio Management
Options Strategies
Delta Neutral Hedging
Covered Calls: Creating Your Own Dividend
Bullish Call Debit Spreads
Bearish Call Debit Spreads
Portfolio Trading Schedule of Activity
Harnessing Your Hybrid Evolution
Chapter 11: Conclusion: Cultivating Your Personal Evolution
Acknowledging the Spirit
Elements that Effect One’s Spirit
Broken Spirits Blowout
Nourish Your Spirit
Continuing Your Progress
Appendix A: My Trading Tools and Anatomy of Pattern Trades (Suri Duddella)
Index
The New copy of this book will include any supplemental materials advertised. Please check the title of the book to determine if it should include any access cards, study guides, lab manuals, CDs, etc.
The Used, Rental and eBook copies of this book are not guaranteed to include any supplemental materials. Typically, only the book itself is included. This is true even if the title states it includes any access cards, study guides, lab manuals, CDs, etc.