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Science and art of day trading

When I wrote The Compleat Day Trader in 1995, I felt that the science and art of day trading had come of age. Given the increased price volatility and technological advances in the delivery and analysis of market-related data, it was clear to me that there would be numerous opportunities for the day trader. And this has indeed been the case. Yet the other side of opportunity is risk. With increased potential for profit comes increased potential for loss. My sense of the markets is that more traders than ever before are either day trading or have a desire to day trade. Do not, however, confuse or equate an increase in the number of day traders with an increase in the percentage of traders who actually win at this high stakes game. I believe that day traders and aspiring day traders need more effective tools to help them navigate the ever more treacherous market waters. My goals, therefore, in writing this new book on day trading were as follows:

ж To present and discuss some of my latest day-trading systems and methods

ж To share new ideas and to amplify on existing ideas for effective risk management both from the standpoint of market methodology and trader psychology

ж To suggest new and promising directions in day trading techniques

ж To fine-tune techniques and methods I have previously discussed

I believe that I have exceeded my original goals. I believe that this book offers several powerful tools as well as numerous promising concepts for further exploration.

The book you are about to read contains a variety of different methods and systems for day trading. Take the time to learn, study, and track the methods. Then, after you have learned the techniques that appeal to your senses and your pocketbook, begin trading with them. But don't plunge into the markets before you have spent some time learning the methods. And when you start your trading, please make certain you understand the risks as well as the rewards of day trading. Be certain to start with sufficient capital and practice all the necessary discipline your methods require.

Finally, do not labor under the misconception that day trading is easy. Although there are several distinct advantages to day trading, it may be true that from the standpoint of self-discipline, day trading is more difficult than position trading. You cannot day trade your way to riches with little effort. Day trading takes work, work, and more work. It requires discipline, attention, organization, and commitment. Success as a day trader does not fall out of a magazine or a book.

I hope that the tools in this book and in my Compleat Day Trader will help you, and I wish you success in your venture. If I can be of assistance, please contact me at the following address:

jake@trade-futures.com

For new developments in my day-trading research visit the following Internet location:

http://www. trade-futures.com

Jake Bernstein Northbrook, Illinois

Acknowledgments

The amount of research that went into the production of this book was enormous. Without the assistance of system-testing software and valid historical data my task would have been impossible to complete. Accordingly, I wish to extend thanks to the following individuals, firms, and organizations for their valuable assistance:

ж Commodity Quote Graphics of Glenwood Springs, Colorado, for permission to reprint charts from SYSTEM ONE, their outstanding quotation/graphics hardware and software program. The CQG software is especially useful in day trading. It has been one of my most valuable day-trading tools for many years and it continues to serve me well.

ж Mr. Bill Cruz of Omega Research in Miami, Florida, and his excellent staff for their continuing assistance and for permission to use reports generated by their excellent system testing software program, TradeStationЩ. This highly developed and advanced program makes the intensive task of historical testing and system development effective and efficient. It is well-suited to the needs of all day traders.

ж Mr. Glen Larson of Genesis Financial Data is due many thanks for his constant supply of historical daily and tick-by-tick data. The development, evaluation, and testing of day-trading systems, indicators, and methods are impossible without accurate tick-by-tick data.

ж FutureSource is due a word of thanks for permission to reproduce charts from their excellent trading software.

ж I am also thankful to all traders who have touched my life with their opinions, suggestions, systems, methods, and timing indicators.

ж My dedicated and hard-working office staff are also commended for their persistent efforts in the production of this book. I am not easy to work with. I change my mind too easily and too quickly although all turns out well in the long run.

ж And finally, many thanks to my family for their patience and willingness to give me the time I needed to complete this important project.

Jake Bernstein