Dear Trading Friend, As a reminder, you are getting email from us because
you either once asked to go on this Traders Ezine list, or requested info
on a trading related subject we normally cover via this communications
method, or you are a client of ours. Your email address and other
information will be kept confidential per our online Privacy Pledge. Of
course, you may opt-off this Traders Ezine at any time if you do not find
this trading knowledge useful.
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In this Edition of Traders Ezine we will give some free helpful excerpts
from our Jesse Livermore Book Reprint, and also more writings from W. D.
Gann. Plus, testimonials from a recent Real Success-2 Course Owner. We
also announce two free bonuses for our Real Success clients.
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Special Announcement - We are happy to report starting this month, Nov
2000, we will be increasing the e-mailing frequency of Traders Ezine to 3
issues per month. This way you will get more and more and rapid trading
knowledge to help you get on the road to profitable trading!
However, we have reduced the frequency of our printed postal mailed CTCN
Newsletters to about 2 or 3 per year, and on an irregular mailing
schedule. The last in-print issue was Issue 52 some months ago. Printed
Issue 53 is now finished and will be mailed to our paid members by
months-end.
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In addition to approx’ 36 Email Traders Ezines per year, and 2 or 3
printed mailed CTCN’s, we will be announcing a number of additional great
benefits for our paid members starting the first of the year. Stay tuned
for the details.
This reduction in CTCN printed issues was due in part to more and more of
our articles and resources being targeted to Ezines and The Web. Also, we
have received considerable support and requests to do this more
electronically for its speed in delivering content and its great cost
effectiveness.
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This is election evening and Hillary Clinton is the winner in New York.
Isn't it amazing how people could vote so heavily for an outsider from
another state, who’s only reason for moving there was an opportunity to
become a Senator!
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By the way, did you know Hillary Clinton was a highly "successful" and
profitable commodity futures trader some years ago? She mainly traded the
C.M.E. Live Cattle market from what we understand. It was alleged the
reason she made so much money trading commodities was profitable trades
being fed to her account, while the broker assigned losing trades to other
accounts!
It was alleged it involved Arkansas politics and a way to reward husband
Bill for possible political favors, past or future. For the details on all
this simply go to our free traders search engine
https://www.webtrading.com/searchengine.htm and do a search for Hillary
Clinton. There is lots of info on this at our search engine. Plus, a
wealth of free information on most trading related subjects.
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To RS2 Video Course clients. In October we did two additional 2-hr video
tapes, Real Success-2 Tapes 5 and 6, shortly after the new RS2 Course was
released in September.
As stated in th RS2 4-Tape Course, we were planning on sending you Tape 5
as a free bonus. As an even better bonus, we have now decided to send you
both Tape 5 and Tape 6 containing 4 more hours of learning, including more
real-time trades actually made during the filming.
We will be mailing them to you in the next day or two. You should get them
soon. I feel you will find these 2 additional tapes very helpful in
mastering the RS2 Trading Methodology. The additional tapes should help
you more fully master the RS2 methodology. Tape 6 also has some additional
tools we recently have discovered.
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Benefits of CTCN and Real Success - Joe Murdock
I know that it has been some time since I’ve checked in with CTCN. I
just wanted to take this opportunity to say thank you once again. Not only
for the “Real Success” tapes, but also for the ongoing benefits of
receiving the CTCN newsletter and your website(s).
I find myself going to the website a least a couple of times a week to
re-read some past articles, or just to see what’s new.
Recently I found Art Simpson’s “Phantom of the Pits” Tough reading, but
good stuff. Just one concept ratcheted my success up a least twenty
notches.
For years I had been taught, and believed, that you set your position,
set your stop (by whatever means); get out at your profit objective or Let
The Market Prove You Wrong! Man, has last bit of “wisdom” cost me both
money and emotional scar tissue!
I read and applied “POPS” theory that It’s Not The Market’s Job To Tell
Me When I’m Wrong...It’s Mine. I can’t tell you how much money and pain
this has saved me. Now I can set my position, allow the market prove me
correct, or if it doesn’t, within an appropriate time, be out like a
scalded cat. Am I out sooner sometimes? Yes. Will I put on a few more
trades during a given time frame? Sometimes. Am I in a much better frame
of mind after taking a $70 hit per contract (commissions included) rather
than $200 or $250 whack in the head? YES!
I know that this is very personal and probably falls under the 20% of any
methodology that is not purely mechanical, but my account balance and
peace of mind tells me that it sure works for me. I can now enter two or
three trades (if necessary) with a much better chance of catching a real
move rather than sitting around in a choppy or sideways market and
watching the market take bites out of my butt until my stop is hit.
Sure it takes more agility, but that’s one of the aspects of day trading
that draws me to it. It keeps me alert and on my toes, and my account
balance and ability to act in tact. Art’s material has been easily as
beneficial as the S.A.T. articles. I still re-read these articles every
month or so.
I first ordered The “Real Success” videotapes and course in April of ‘99.
It’s taken a bit longer than I originally expected to get where I am, but
with the tapes, your support and the ongoing education I receive from your
website (s), I will be trading for a living within the next two or three
months.
Keep the forum alive. It’s the best stuff out there. Looking forward to
Real Success-2.
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How To Make Speculation A Profitable Profession
Excerpts from the W. D. Gann Commodities Course by W. D. Gann
Speculation or investment is the best business in the world if you
make a business of it. But in order to make a success of it you must
study and be prepared and not guess, follow inside information, or depend
on hope or fear. If you do, you will fail. Your success depends on
knowing the right kind of rules and following them.
Fundamental Rules
Keep this well in mind. For commodities to show up trend and
continue to advance, they must make higher bottoms and higher tops. When
the trend is down, they must make lower tops and lower bottoms and
continue on down to lower levels. But remember prices can move in a
narrow trading range for weeks or months or even years and not make a new
high or a new low.
But after a long period of time when commodities break into new lows they
indicate lower prices and after a long period of time when they advance
above old highs or old tops they are in a stronger position and indicate
higher prices. This is the reason why you must have a chart a long ways
back in order to see just what position a commodity is in and at what
stage it is between extreme high and extreme low.
Three Ways To Square Time And Price
We can square the range, that is, the number of cents from extreme
low to extreme high with time; then square the extreme low price with
time; and square the extreme high price with time. When the market passes
out of these squares and breaks important angles, the trend changes up or
down.
1. Range - The range that any option makes between extreme high and
extreme low can be squared, so long as it remains in the same price range.
If the range is 25¢, it squares with 25 periods of time—days, weeks or
months. Continue to use this time period as long as it stays in the same
range.
2. Squaring Time with Bottom or Extreme Low Price - The next important
price to square with time is the lowest price or bottom of any important
decline. Example: If the bottom of an option is 25, then at the end of 25
days, 25 weeks or 25 months, time and price are equal. Watch for a change
in trend as based on its bottom or lowest selling price. As long as the
option continues to hold one bottom and advances, you can always use this
time period running across and continuing the time period, noting every
time it passes out of the square. Watch especially when the price reaches
the third square, the fourth square, and again the seventh and ninth
squares of its time period.
These squares only occur frequently on the daily or weekly charts, as the
monthly in most cases would move out of a range, up or down, before it
squared a bottom as many as 7 or 9 times. However, this does sometimes
happen when an option is in a narrow range for many years.
Example: May Beans, 1939, July 27, low 67. This would require 67
months or 67 weeks to square the lowest price. Note monthly chart marked
“Squares of 44 and 67.”
3. Squaring Time with Top or Extreme High Price - The other important
price with which to square time is the extreme high price of an option.
The time period must be carried across from the high of the daily, weekly
or monthly, and the square of the top price in time must be noted and
watched for a change in trend. If the top of an option is 50, then, when
it has moved over 50 days, 50 weeks or 50 months, it has reached its
square in time and an important change is indicated. This can be
determined by the position of the angles from top and bottom. Example: May
Soy Beans, 1948, January 15, high 436¾. This requires 436¾ weeks to
square Price with Time.
Both major and minor tops and bottoms on all time periods must be
watched as they square out right along. Most important of all is the
extreme high price on the monthly high and low chart. This may be very
high and work out a long time period before it squares the top, in which
case you have to divide the price like 8 equal time periods and watch the
most important points like ¼ ,1/3, ½ and 3/4, but most important of all is
when Time equals Price.
When you are watching the position of an option, after it has squared
out from a bottom or a top, always look up the time period and the angles
from the opposite direction. If the market is nearing a low price,
squaring out a top, see how its relation is to the bottom as it might be
in the second or third square period from the bottom, which would be a
double indication for a change in trend.
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Excerpts from Reminiscences of Jesse Livermore
… But I didn’t always win. My plan of trading was sound enough and won
oftener than it lost. If I had stuck to it I’d have been right perhaps as
often as seven out of ten times.
In fact, I always made money when I was sure I was right before I
began. What beat me was not having brains enough to stick to my own
game—that is, to play the market only when I was satisfied that precedents
favored my play.
There is a time for all things, but I didn’t know it. And that is
precisely what beats so many men in Wall Street who are very far from
being in the main sucker class.
There is the plain fool, who does the wrong thing at all times
everywhere, but there is the Wall Street fool, who thinks he must trade
all the time. No man can always have adequate reasons for buying or
selling stocks daily or sufficient knowledge to make his. Play an
intelligent play.
I proved it. Whenever I read the tape by the light of experience I
made money, but when I made a plain fool play I had to lose.
The desire for constant action irrespective of underlying conditions
is responsible for many losses in Wall Street even among the
professionals, who feel that they must take home some money every day, as
though they were working for regular wages. I was only a kid remember…
You watch the market—that is, the course of prices as recorded by the
tape with one object: to determine the direction—that is, the price
tendency. Prices, we know, will move either up or down according to the
resistance they encounter. For purposes of easy explanation we will say
that prices, like everything else, move along the line of least
resistance. They will do whatever comes easiest; therefore they will go up
if there is less resistance to an advance than to a decline; and vice
versa.
Nobody should be puzzled as to whether a market is a bull or a bear
market after it fairly starts. The trend is evident to a man who has an
open mind and reasonably clear sight, for it is never wise for a
speculator to fit his facts to his theories. Such a man will, or ought to,
know whether it is a bull or a bear market, and if he knows that, he knows
whether to buy or to sell. It is therefore at the very inception of the
movement that a man needs to know whether to buy or to sell.
As a matter of fact, millions upon millions of dollars have been lost by
men who bought stocks because they looked cheap or sold them because they
looked dear.
The speculator is not an investor. His object is not to secure a
steady return on his money at a good rate of interest, but to profit by
either a rise or a fall in the price of whatever he may be speculating in.
Therefore the thing to determine is the speculative line of least
resistance at the moment of trading; and what he should wait for is the
moment when that line defines itself, because that is his signal to get
busy.
The public is so often whipsawed that one marvels at their
persistence in not learning their lesson.
You will find in actual practice that if you trade as I have
indicated any important piece of news given out between the closing of one
market and the opening of another is usually in harmony with the line of
least resistance. The trend has been established before the news is
published, and in bull markets bear items are ignored and bull news
exaggerated, and vice versa.
Before the war broke out the market was in a very weak condition. There
came the proclamation of Germany’s submarine policy. I was short one
hundred and fifty thousand shares of stock, not because I knew the news
was coming, but because I was going along the line of least resistance.
What happened came out of a clear sky, as far as my play was concerned. Of
course, I took advantage of the situation and I covered my shorts that day.
It sounds very easy to say that all you have to do is to watch the
tape, establish your resistance points and be ready to trade along the
line of least resistance as soon as you have determined it. But in actual
practice a man has to guard against many things, and most of all against
himself—that is, against human nature. That is the reason why I say that
the man who is right always has two forces working in his favor basic
conditions and the men who are wrong.
In a bull market bear factors are ignored. That is human nature, and
yet human beings profess astonishment at it. People will tell you that the
wheat crop has gone to pot because there has been bad weather in one or
two sections and some farmers have been ruined. When the entire crop is
gathered and all the farmers in all the wheat-growing sections begin to
take their wheat to the elevators the bulls are surprised at the smallness
of the damage. They discover that they merely have helped the bears.
When a man makes his play in a commodity market he must not permit
himself set opinions. He must have an open mind and flexibility. It is not
wise to disregard the message of the tape, no matter what your opinion of
crop conditions or of the probable demand may be. I recall how I missed a
big play just by trying to anticipate the starting signal. I felt so sure
of conditions that I thought it was not necessary to wait for the line of
least resistance to define itself. I even thought I might help it arrive,
because it looked as if it merely needed a little assistance.
I was very bullish on cotton. It was hanging around twelve cents,
running up and down within a moderate range. It was in one of those
in-between places and I could see it. I knew I really ought to wait. But I
got to thinking that if I gave it a little push it would go beyond the
upper resistance point.
I bought fifty thousand bales. Sure enough, it moved up. And sure enough,
as soon as I stopped buying it, it stopped going up. Then it began to
settle back to where it was when I began buying it. I got out and it
stopped going down. I thought I was now much nearer the starting signal,
and presently I thought I’d start it myself again. I did. The same thing
happened. I bid it up, only to see it go down when I stopped. I did this
four or five times until I finally quit in disgust. It cost me about two
hundred thousand dollars. I was done with it. It wasn’t very long after
that when it began to go up and never stopped till it got to a price that
would have meant a killing for me—if I hadn’t been in such a great hurry
to start.
This experience has been the experience of so many traders so many times
that I can give this rule: In a narrow market, when prices are not getting
anywhere to speak of but move within a narrow range, there is no sense in
trying to anticipate what the next big movement is going to be up or down.
The thing to do is to watch the market, read the tape to determine the
limits of the get-nowhere prices, and make up your mind that you will not
take an interest until the price breaks through the limit in either
direction. A speculator must concern himself with making money out of the
market and not with insisting that the tape must agree with him. Never
argue with it or ask it for reasons or explanations. Stock-market
post-mortems don’t pay dividends.
Not so long ago I was with a party of friends. They got to talking wheat.
Some of them were bullish and others bearish. Finally they asked me what I
thought. Well, I had been studying the market for some time.
I knew they did not want any statistics or analyses of conditions. So I
said: “If you want to make some money out of wheat I can tell you how to
do it.”
They all said they did and I told them, “If you are sure you wish to make
money in wheat just you watch it. Wait. The moment it crosses $1.20 buy it
and you will get a nice quick play in it!”
“Why not buy it now, at $1.14?” one of the party asked.
“Because I don’t know yet that it is going up at all.”
“Then why buy it at $1.20? It seems a mighty high price.”
“Do you wish to gamble blindly in the hope of getting a great big profit
or do you wish to speculate intelligently and get a smaller but much more
probable profit?”
They all said they wanted the smaller but surer profit, so I said,
“Then do as I tell you. If it crosses $1.20 buy.”
As I told you, I had watched it a long time. For months it sold
between $1.10 and $1.20, getting nowhere in particular. Well, sir, one day
it closes at above $1.19. I got ready for it. Sure enough the next day it
opened at $1.20-1/2, and I bought. It went to $1.21, to $1.22, to $1.23,
to $1.25, and I went with it.
Now I couldn’t have told you at the time just what was going on. I
didn’t get any explanations about its behavior during the course of the
limited fluctuations. I couldn’t tell whether the breaking through the
limit would be up through $1.20 or down through $1.10 though I suspected
it would be up because there was not enough wheat in the world for a big
break in prices.
As a matter of fact, it seems Europe had been buying quietly and a
lot of traders had gone short of it at around $1.19. Owing to the European
purchases and other causes, a lot of wheat had been taken out of the
market, so that finally the big movement got started. The price went
beyond the $1.20 mark. That was all the point I had and it was all I
needed. I knew that when it crossed $1.20 it would be because the upward
movement at last had gathered force to push it over the limit and
something had to happen. In other words, by crossing $1.20 the line of
least resistance of wheat prices was established. It was a different story
then.
I remember that one day was a holiday with us and all our markets
were closed. Well, in Winnipeg wheat opened up six cents a bushel. When
our market opened on the following day, it also was up six cents a bushel.
The price just went along the line of least resistance.
What I have told you gives you the essence of my trading system as based
on studying the tape. I merely learn the way prices are most probably
going to move. I check up my own trading by additional tests, to determine
the psychological moment. I do that by watching the way the price acts
after I begin.
It is surprising how many experienced traders there are who look
incredulous when I tell them that when I buy stocks for a rise I like to
pay top prices and when I sell I must sell low or not at all.
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More Real Success-2 Feedback - Joe Murdock
It’s Friday afternoon after the close. I just thought I’d give you some
feedback after the first full week of trading with the “Real Success 2”
trading methodology.
I received the tapes and immediately locked myself in the “immersion
room” to see if I could digest them before Monday’s opening.
To be honest, at first I was a little taken aback. After trading
successfully for more than a year with the original “Real Success” method,
where the hell were my trusted swing-highs and swing-lows? What is this
stuff about Keltner reversal bars? What is a Keltner extreme move? How am
I going to trade 1-minute bars?
After the initial shock wore off I realized that you had, not only, made
the methodology in the first series more sound, but enhanced and expanded
upon it with completely new material. Great job.
By Monday morning I thought was comfortable enough to boot up and give it
try. I wasn’t. I paper traded all day. I kept watching the screen,
referring to the tapes, watching the screen . . . etc . . . By the end of
the day I was both angry with myself for not trusting the methodology, and
exhilarated by the results. I couldn’t wait for Tuesday.
To save time, I’ll give you just the highlights.
From Tuesday through Friday by the lunch break I had made twenty-three
trades. (more than normal) I had seven winners in a row. (modest), one
loser, (again modest) seven winners, one loser, and then six winners, one
loser. Now the best, using simply the most basic tenant of the method, I
was able to catch a large part of the 1125 point move to the downside that
occurred about twenty minutes form the close. What a way to go into the
weekend!!!
Do I expect to keep up this pace? Probably not. Does the “Real Success
2” methodology work. You tell me.
Honesty Dave, I did nothing but what I was taught on the tapes. Sure feel
does play a part. You go to great pains to point out that no method is
100% mechanical. But I can only tell you of my experience. Some days its
there, some days it’s not. But it sure helps to have tools you can believe
in. I have been trading my own account for about 5 years. It wasn’t until
I got my hands on the first “Real Success” tapes that I started to make
consistent money.
In my opinion, RS2 is even more powerful. I honestly don’t know if you
must study and apply RS1 before you can take full advantage this new
material, maybe not. But I do know that my experience has been nothing
but positive.
There is a selfish part of me that hopes I can keep this new knowledge
all to myself. But the larger part, the guy who was frustrated and
struggling for three years would hope that anyone who is in that same boat
would do themselves a big favor and start seriously studying either or
both of this really terrific work.
Thanks again Dave. I am sorry I really haven’t contributed very much to
the CTCN Newsletter, but I’m really not much of a technical guy, and
pretty much like to mind my own business. But damn, when someone has been
as helpful as you have I’ve got to stick my head up and say “Great job.”
Please let me know when the next series is coming out. I’ll be watching.
Joe
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Editor's Note: By the way, you can still get our Real Success 2 Video Tape
Trading Course, the order links are at the bottom of this Ezine.
--------------------
Re: Free E-Mini-SP Website and its S&P Real-Time data feed and chart:
Due to technical difficulties beyond our control, our non-commercial
no-ad quick-loading website chart on our www.e-mini-sp.com
without the advertising). Therefore, the old banner advertising S&P Chart
is now up until the free non-commercial site can be fixed. It’s still
real-time non-delayed and free, but you will have to tolerate the annoying
ads until we are able to resolve the problem. We will let you know when
it’s fixed.
All the best,
Dave Green, Editor
P.S. Here are some suggested trading related links:
More Info and to Order our Gann Commodities Course
https://www.webtrading.com/gann-commodities-course.htm
Commodity Traders Club Free Knowledge Based Primary Website
https://www.webtrading.com/ <https://www.webtrading.com/>;
Real Success 2nd Edition Trading Course Information is here
https://www.traders.org/realsuccess2.htm
RS-2 Guarantee Info https://www.traders.org/guaranty.htm
To Order RS-2: https://www.traders.org/rsorder.htm
CTCN Club Paid Membership https://www.webtrading.com/member.htm
Traders Organization Portal Guide for Daytraders https://www.traders.org
Year 2001 London, England RS-2 Trading Seminar
https://trading-seminars.com/
Webtrading Knowledge Based Free Traders Search Engine
https://www.webtrading.com/searchengine.htm
W. D. Gann Trading Techniques Gann Methods Trading Course & Gann
Commodities Course https://www.webtrading.com/gann.htm
Low-Cost Options & Spreads Trading Course – The author (Greg Donio) say’s
90% Wins Are Possible with this specific options strategy!
https://www.webtrading.com/options.htm
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