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Computers: Help or Hindrance?

In many cases and for many traders, the use of a computer for the purpose of generating trades won't help. In fact, it may hinder. Let's face it; most people aren't computer-literate. They have a very poor understanding of what a computer can and cannot do for them as a vehicle for generating trading profits. Only after a trader has defined his or her direction can a decision be made about the value of a computer in the trading program.

So if you're new to the futures markets and you can't afford several thousand dollars for a computer and software, then you need to put your efforts toward using simple systems that don't require the added expense. The fact is that there are many ways to trade without a computer.

Summary

This chapter reviewed the major issues and obstacles that await and confront the day trader. Specific answers were given as suggestions for overcoming the limitations and roadblocks to success.

I stressed that day trading, more than any other form of trading, should be considered as a science and not as an art. While the day trader has the advantage of not being concerned about overnight moves, the limitation of day trading is clearly that there is a limit to the profits one may make within the time frame of a single day. However, if the trader is careful to operate only in volatile markets, then the problem of limited profit potential will be overcome. Since day trading occurs within a strictly circumscribed time frame, there are rules and operational procedures that are unique to the day trader.

Of all the day-trading methods I have found or developed during my 30 years in the markets, there are few that can compare to the 30-minute breakout (30MBO) either in terms of simplicity or in terms of their ability to grab the "big ones." But do not forget that day trading is a two-way street: it can reward handsomely or sting painfully. While the 30MBO is simple to use, understand, and implement, it also requires the utmost in discipline as well as considerable courage, since it requires the trader to do the two things that are most difficult for traders to do. Specifically, 30MBO requires traders to buy or sell on a breakout to new high ground for the day or to new low ground for the day, and thereafter to maintain their position until the end of the day, unless stopped out.