Index
A
AAPL (Apple Inc.), 61
Action Alerts Plus, 13
Albemarle, 167
American Express (AXP)
patterns, 58–60
time frames, 86
analyzing charts, 51–55
angular trend lines, 66–69
Chesapeake Energy example, 74
Exxon Mobile example, 73
Fifth Third Bancorp example, 71–72
anticipatory capital deployment, 70
anticipatory trading, 110–115
Apple Inc. (AAPL), 61
avoiding blowups, 199–202
AXP (American Express)
time frames, 86
B
backing and filling, 28
bearish wedge pattern, 31
biases, eliminating, 20
biotechnology stocks, 201–202
blowups
avoiding, 199–202
handling, 195–199
bullish cliff pattern, 31
buy-and-hold strategy, 16, 36–38
C
calculating total portfolio risk, 157–159
capital deployment, 70
CBS Corp, 131–132
charts
analyzing, 51–55
50-day moving averages, 189–193
importance of, 173–174
patterns. See pattern recognition
trend lines
angular trends, 66–69
Chesapeake Energy example, 74
explained, 57–60
Exxon Mobile example, 73
Fifth Third Bancorp example, 71–72
lateral trends, 61–66
NASDAQ 100 from 2002–2008, 74
Potash example, 72
trading strategies and capital deployment methodologies, 73
Chesapeake Energy, 74
choosing time frame, 85–95
Coca Cola (KO), 37
controlling risk, 156–160
Cramer, Jim, 13–14
cup and handle pattern, 58
D
Darvas, Nicholas, 15
day trading, 38–41
dealing with emotions, 183–187
delayed reactionary trading, 115–119
DePorre, James “Rev Shark,” 14–15, 161
Dodd, David, 12
E
earnings announcements, 199–200
education of author, 9–17
Einstein, Albert, 100
embracing market opportunities, 19–23
emotions
dealing with, 183–187
emotional capital, 184–186
entry
entry points, determining, 109
anticipatory trading, 110–115
delayed reactionary trading, 115–119
General Electric case study, 120–123
reactionary trading, 113–115
timing, 47–51
experience of author, 9–17
Express Scripts, 117–120
Exxon Mobile, 73
F
FDA (Food and Drug Administration), 201
Fifth Third Bancorp, 71–72
50-day moving averages, 189–193
following trends, 189–193
Food and Drug Administration (FDA), 201
Ford Motor Co.
anticipatory versus reactionary trading, 109–117
stop strategy example, 129–130
fractal nature of pattern recognition, 85–87
G
gains, taking, 161–171
General Electric, 120–123, 135
Gilead Sciences (GILD), 86
Graham, Benjamin, 12
H
Halliburton, 142–143
handling blowups, 195–199
head and shoulders pattern, 29, 59
head games, 181–182
higher lows, 68
house money, 158
I
IBM, 144–145
stop strategy example, 135
inflection points, 62–63
The Intelligent Investor (Graham and Dodd), 12
J-K-L
level one traders, 5
level three traders, 6
level two traders, 5
limit orders, 176
M-N
market opportunities, recognizing and embracing, 19–23
MeatBaron, 101–102
Mosaic Company (MOS), 176–179
moving averages, 189–193
NASDAQ 100
2002-2008, 74
charting, 65
O
O’Neil, Bill, 15
opportunities, recognizing and embracing, 19–23
other traders, analyzing actions of, 25–32
P
pattern failure, 146
pattern recognition
backing and filling, 28
bearish wedge pattern, 31
bullish cliff pattern, 31
cup and handle pattern, 58
fractal nature of, 85–87
head and shoulders pattern, 29, 59
trend lines
angular trends, 66–69
Chesapeake Energy example, 74
explained, 57–60
Exxon Mobile example, 73
Fifth Third Bancorp example, 71–72
lateral trends, 61–66
NASDAQ 100 from 2002–2008, 74
Potash example, 72
trading strategies and capital deployment methodologies, 73
portfolio graveyards, 53
portfolio risk, calculating, 157–159
Potash, 72
profit levels
calculating, 106
reviewing, 176
profit strategy, 161–171
psychological roadblocks to trading, 19–23
psychology of trading success, 181–182
Q-R
reactionary capital deployment, 70
reactionary trading, 113–115
recognizing market opportunities, 19–23
Rev Shark (James DePorre), 14–15, 161
reviewing trading strategy
chart work, 173–174
Mosaic Company (MOS) case study, 176–179
ongoing execution, 176
pattern recognition, 174
profit levels/limit orders, 176
share count, 175
stop level, 175
trading journals, 174
risk
calculating total portfolio risk, 157–159
controlling, 156–160
determining risk level per trade, 149–155
risk per share, 105
risk tolerance, 149
total risk for trade, 105
Risk Analyzer, 157–159
S
setting stops, 125–135
share count, 175
Smitten, Richard, 15
special events, 201
stocks, 58. See also specific stocks
biotechnology, 201–202
earnings announcements, 199–200
inflection points, 62–63
strategies
analyzing actions of other traders, 25–32
blowups
avoiding, 199–202
handling, 195–199
day trading, 38–41
dealing with emotions, 183–187
determining entry points, 109
anticipatory trading, 110–115
delayed reactionary trading, 115–119
General Electric case study, 120–123
reactionary trading, 113–115
importance of choosing a strategy, 33–36, 43–45
pattern recognition. See pattern recognition
profit strategy, 161–171
psychology of trading success, 181–182
reviewing
chart work, 173–174
Mosaic Company (MOS) case study, 176–179
ongoing execution, 176
pattern recognition, 174
profit levels/limit orders, 176
share count, 175
stop level, 175
trading journals, 174
risk
calculating total portfolio risk, 157–159
controlling, 156–160
determining risk level per trade, 149–155
risk tolerance, 149
technical analysis
charts, 51–55
explained, 41–42
limitations of, 5–7
moving beyond basics, 77–83
time frames
choosing, 85–95
time frame jumping, 87
trade-the-trader strategy, 137–147
value investing, 36–38
T
taking gains, 161–171
technical analysis
charts, 51–55
explained, 41–42
limitations of, 5–7
moving beyond basics, 77–83
time frames
choosing, 85–95
time frame jumping, 87
timing entry, 47–51
total portfolio risk, calculating, 157–159
total risk for trade, 105
“towel trade,” 2
trade-the-trader strategy, 1–7, 137–147
traders
effect of traders on market movement, 1–7
levels of traders, 5–6
trading strategies
analyzing actions of other traders, 25–32
blowups
avoiding, 199–202
handling, 195–199
day trading, 38–41
dealing with emotions, 183–187
determining entry points, 109
anticipatory trading, 110–115
delayed reactionary trading, 115–119
General Electric case study, 120–123
reactionary trading, 113–115
importance of choosing a strategy, 33–36, 43–45
pattern recognition. See pattern recognition
profit strategy, 161–171
psychology of trading success, 181–182
reviewing
chart work, 173–174
Mosaic Company (MOS) case study, 176–179
ongoing execution, 176
pattern recognition, 174
profit levels/limit orders, 176
share count, 175
stop level, 175
trading journals, 174
risk
calculating total portfolio risk, 157–159
controlling, 156–160
determining risk level per trade, 149–155
risk tolerance, 149
technical analysis
charts, 51–55
explained, 41–42
limitations of, 5–7
moving beyond basics, 77–83
time frames
choosing, 85–95
time frame jumping, 87
trade-the-trader strategy, 137–147
value investing, 36–38
trend lines
angular trends, 66–69
Chesapeake Energy example, 74
explained, 57–60
Exxon Mobile example, 73
Fifth Third Bancorp example, 71–72
lateral trends, 61–66
NASDAQ 100 from 2002–2008, 74
Potash example, 72
trading strategies and capital deployment methodologies, 73
trends, following, 189–193
U-Z
value investing, 36–38
Winn Dixie, 22