Cover image for The complete idiot's guide to day trading like a pro
Title:
The complete idiot's guide to day trading like a pro
Author:
Sander, Jennifer Basye, 1958-
Publication Information:
New York : Alpha Books, [1999]

©1999
Physical Description:
312 pages : illustrations ; 23 cm
Language:
English
Added Author:
ISBN:
9780028636535
Format :
Book

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Summary

Summary

A guide to investing and trading over the Internet. The text includes information on what to trade, definitions of words every trader should know - including stocks, bonds, options, and commodities, effective trading techniques from professionals, and advice on how to be a success.


Table of Contents

Part 1 A Day at a Timep. 1
1 Just What Is Day Trading?p. 3
In and Outp. 4
Discipline: The Big "D"p. 4
Nothing Held Overnight?p. 4
A High-Performance Jetp. 5
A New Revolution, an Old Ideap. 5
Put It in the Bucketp. 5
The Dark Agesp. 5
But I Thought This Was an Investing Bookp. 6
Help for All Mankindp. 7
Pure Capitalismp. 7
Maximum Liquidityp. 7
The Public Marketp. 7
What Does This Have to Do with Day Trading?p. 8
Not Just a Jobp. 8
Can I Quit My Job?p. 8
Just How Much Can I Make?p. 9
Tax Timep. 10
Who Wins and Why?p. 10
Does Anyone Important Do This?p. 10
What We Assume You Already Knowp. 11
Warning, Warning!p. 11
What Not to Expectp. 12
2 The (Re-) Emergence of Day Tradingp. 13
The Electronic Revolutionp. 13
Vacuum-Tube Logicp. 13
The Renaissance Trading Fairep. 14
The Electronic (Market) Agep. 14
Net Gainsp. 15
Getting Connectedp. 15
It Drives Fast, but What Good Is It?p. 16
The Three I's: Information, Information, Informationp. 16
High-Performance Informationp. 17
The Three A's: Access, Access, Accessp. 17
High-Performance Accessp. 18
New Rules and Toolsp. 18
Tool Change: DOT and SuperDot on the NYSEp. 18
Tool Change: SOES on NASDAQp. 19
Rule Change: Limit Order Protection Rulep. 19
Rule Change: Teeniesp. 19
Future Rules and Toolsp. 19
Commission Remissionp. 20
A Bigger Roller Coasterp. 21
The New Right-to-Work Statep. 21
3 Is This Bud for You?p. 23
Day Traders Come in Different Colorsp. 23
Peas, Carrots, Beans, or Cornp. 24
A Question of Stylep. 25
Timing--What Makes You Tick?p. 26
What It Takesp. 27
OK, How'd You Do?p. 29
4 There Are So Many Good Things to Buyp. 31
Making the Shopping Listp. 31
Liquidityp. 32
Volumep. 32
Movementp. 32
Access to Informationp. 33
Easy Access to Tradep. 33
Stocking Up on Stocksp. 33
Stock Marketsp. 34
Stock Pricesp. 34
Other Options?p. 35
What Is an Equity Option?p. 35
Option Pricesp. 36
A Transfer of Riskp. 36
Equity-Option Pricingp. 36
At, In, or Out of the Moneyp. 37
What About Day-Trading Options?p. 37
Fire in the Belliesp. 38
Commodity Futuresp. 38
Financial Asset Futuresp. 39
Fingering the Indexesp. 39
We Pick Stocks. Why?p. 40
To Infinity, and Beyondp. 40
5 Why All the Fuss?p. 41
Who's Making Such a Stink?p. 41
The Disapproving Parentsp. 42
Badges? We Don't Need No Stinking Badges!p. 43
"Know Your Customer"p. 44
Online Threatsp. 45
Who's Making the Market?p. 46
Planners Pan itp. 46
Flat, Busted, Brokep. 47
Changing the Rulesp. 47
Part 2 A Trip to the Marketsp. 49
6 Trading Places: The NYSEp. 51
Wall and Broadp. 51
A Star Is Bornp. 52
A Little More Historyp. 52
Big and Small, but Mostly Bigp. 53
Making the Day Trader's Listp. 54
The Big Apple Auctionp. 54
Enter the Auctioneerp. 55
Front-Row Seatsp. 55
An Auction Specialistp. 55
The Specialist's Specialtyp. 55
Who He (She) Is, What He (She) Doesp. 55
A Question of Balancep. 56
The Reward Systemp. 56
Electronic SuperDotsp. 56
Why SuperDot?p. 57
What This Means to Youp. 57
Anatomy of a Tradep. 57
Cast of Charactersp. 58
Setting the Stagep. 59
Act Onep. 59
Act Twop. 60
Act Threep. 60
Epiloguep. 60
Other Dance Floorsp. 61
7 Trading Places: The NASDAQp. 63
Cyberfloorp. 64
A Negotiated Marketp. 64
Enter the Computerp. 64
Maker's Marketp. 65
Market Makers Are People, Toop. 65
What Does a Market Maker Do?p. 65
Market Makers Under the Microscopep. 66
Market Makers Play Rugbyp. 67
The Rumor Mill Grinds Onp. 67
Electronic Everythingp. 67
No Yelling on This Floorp. 68
Swift, Silent Executionp. 68
Hot SOESp. 69
Why SOES?p. 69
SOES rulesp. 69
The Infamous SOES Banditp. 69
ECN: A New Networkp. 70
ECNs--Why and What?p. 70
Finding the ECN Channelp. 70
Keeping the Ratings Upp. 71
Pause for Station Identificationp. 71
Anatomy of a Tradep. 72
Act Onep. 72
Act Twop. 72
Act Threep. 73
8 On the Movep. 75
Comparing NASDAQ and NYSEp. 75
30-Second Review--NYSEp. 75
30-Second Review--NASDAQp. 76
So What's the Big Difference?p. 77
Indexing the Marketp. 77
Can 30 Represent Thousands?p. 78
Fine, but How Do I Use?p. 78
So Quoth the Marketp. 79
What's in a Quote?p. 79
Who Pays for Quotes?p. 80
Fundamental Changesp. 80
Behind the Scenesp. 81
All a Matter of Timep. 81
Technical Changesp. 81
Sense of the Actionp. 81
Up, Down--Cash in Either Wayp. 82
Sell Me Shortp. 82
Rules, Rules, Rulesp. 82
Day Trader's Armaggedonp. 82
Part 3 Tools to Keep You Informedp. 85
9 Watching the World Go 'Roundp. 87
A Window Seatp. 87
So Many Formsp. 88
Smart Newsp. 89
The Whole Point Is Advantagep. 89
Daily Fishwrapsp. 90
A Financial Paperp. 90
The Journalp. 90
Investing in IBDp. 90
Get with the Timesp. 92
The Squawk Boxp. 92
See NBCp. 92
Mountains in Bloomp. 93
Nighttime TVp. 93
The Othersp. 94
And on the Radiop. 94
A Net Full of Newsp. 94
Really Freep. 95
Semi-Freep. 96
Paid Forp. 97
Research Like a Foolp. 97
Zack's Fifth Avenuep. 97
Fool's Commentaryp. 98
Tech Talkp. 99
10 More Information, Pleasep. 101
A Bigger Radar Screenp. 101
Kinds of Radar Screensp. 101
What's It Gonna Cost?p. 102
Learning Your Lessonp. 102
Power Pushp. 102
The World at Your Fingertipsp. 103
Just the Features, Pleasep. 103
Double Half-Caf Light Foam No-Calp. 104
Let's Take a Closer Lookp. 105
Map, Pleasep. 105
A Look at the Stickerp. 106
Getting Wiredp. 107
Where Do I Sign Up?p. 107
Look Ma, No Wires!p. 108
FM--No Static at Allp. 108
Cool Gadgets Aren't Freep. 109
The Store Windowp. 109
Create the Perfect Chartp. 110
Omigosh, Statistics?p. 110
Tech Toolsp. 110
Net-Based Toolsp. 111
Software Packagesp. 111
The Rules Committeep. 112
A Couple of Favoritesp. 112
11 For a Day Trader's Eyes Onlyp. 115
The Virtual Coffee Potp. 115
Cream and Sugarp. 116
Don't Skip Batting Practicep. 118
The Short Listp. 118
On the Local Scenep. 119
The Rumor Millp. 120
The Day Trader's Buzzp. 121
Re-Enter the Foolp. 122
Book 'Em, Dannop. 122
Integration Without a Busp. 122
A One-Stop Shopp. 123
Part 4 Tools of the Tradep. 125
12 May We Take Your Order?p. 127
Mark It "Market," "Day," or "Good Till Cancelled"p. 128
Make Mine Market, Pleasep. 128
A Day at a Timep. 129
Good Till What?p. 129
Fill or Killp. 129
Canceling the Flightp. 130
Backing Outp. 130
Catching an Earlier Flightp. 130
Know Your Limitsp. 130
Buy Limit Ordersp. 131
Sell Limit Ordersp. 131
Using Your Limitsp. 131
Stop Me Before I Fall Again!p. 132
Buy Stop Ordersp. 132
Sell Stopp. 132
Putting a Limit to a Stopp. 133
Paying the Freightp. 133
The Long and Short of Itp. 133
Selling Yourself Shortp. 133
But You've Gotta Know the Rulesp. 134
Putting Your Shorts Onp. 134
Shorting at the Marginp. 135
Losing Your Shortsp. 135
Shorting as a Strategyp. 135
13 Living at the Marginp. 137
At the Marginp. 137
Terms, Conditions, and a Few More Termsp. 138
Current Market Valuep. 138
Initial Margin Requirementp. 138
Debit Balancep. 138
Equityp. 138
Excess Equityp. 139
Minimum Maintenance Requirementp. 139
The Margin Hit Listp. 140
What's the Point?p. 141
What Does Margin Cost?p. 141
The Daily Numbersp. 141
"Dear, Your Broker Is on the Phone..."p. 142
How Much Do I Need?p. 142
Will You Take a Check?p. 143
Lock, Stock, and Barrelp. 143
Should You Use Margin?p. 144
14 Getting It Onlinep. 145
Trading at the Speed of Lightp. 146
Sedan or Performance Machine?p. 147
The Internet Chevyp. 147
The Direct-Access Corvettep. 147
Brokering the Internetp. 148
Vanilla, Chocolate, or Strawberryp. 148
Full Service Meets E-Servicep. 148
At a Discountp. 148
"E" from the Ground Upp. 149
Kicking the Tiresp. 149
Features and Servicesp. 149
Performance and Dependabilityp. 150
Router Rooterp. 151
Manual Backupp. 152
Ease of Usep. 152
Costp. 153
Minimum Requirementsp. 154
Checking Out the Service Departmentp. 154
Customer-Service Deskp. 154
Training, Educationp. 154
Securityp. 155
What Does Consumer Reports Say?p. 155
On the Magazine Standp. 155
On the Webp. 155
15 Taking It to Level IIp. 157
A Color Radar Screenp. 157
Remember the Market Makerp. 158
Supply and Demandp. 159
Picking Up the Echop. 159
Ground Schoolp. 159
Back to Level Ip. 160
Locking In on the Crowdp. 161
What Do I Hear Bid?p. 161
An Offer We Can't Refusep. 162
So What Happens Now?p. 162
And Now, Live from Level IIp. 163
Bells and Whistlesp. 164
The Corner Color Barp. 164
Market Maker Watchp. 165
A Time for All Salesp. 165
At Your Local Avionics Storep. 166
What's It Gonna Cost Me?p. 167
Training Wheelsp. 167
16 A High-Performance Trading Jetp. 169
An Advanced Weapons Systemp. 170
Engines and Controlsp. 170
Launch Your Own Invasionp. 171
What's in the Cockpit?p. 171
The Instrument Clusterp. 171
For Your (Many) Eyes Onlyp. 172
Tickering Aroundp. 172
Tick Thisp. 172
On Alertp. 173
You've Locked In--Now What?p. 173
A Trader's Joystickp. 174
Immediate Executionp. 174
Confirmationp. 174
Flipping to the ECN Channelp. 175
Divergencep. 175
Preferencingp. 175
Time in Forcep. 175
Changing Your Mindp. 175
Let's Take a Closer Lookp. 176
Hotkeysp. 177
Picking Out Your Jetp. 177
Speed, Climb, Payload, Costp. 178
A Checklistp. 178
Information and Decision Supportp. 178
Trading and Execution Supportp. 179
Account Managementp. 179
PandL Performance Trackingp. 179
What About Training?p. 180
OK, Who Makes These Jets?p. 180
Are Internet Brokers Seizing the Opportunity?p. 180
Is It in Your Defense Budget?p. 181
How Do They Charge?p. 181
Minimum Requirementsp. 181
Trading in the Parlorp. 181
Trading-Room Advantagesp. 182
Where to Lookp. 183
Licensed for Actionp. 184
Part 5 Reading the Tea Leavesp. 187
17 Getting an Attitudep. 189
The Day-Trading Picnicp. 190
Data Doesn't Replace Judgmentp. 190
I Thought My Computer Could Do Thisp. 191
IS It a Random Walk?p. 191
Applying Science to Chaosp. 191
What's This Have to Do with the Markets?p. 192
Why Have an Attitude?p. 192
Be with the SandPp. 193
Let's Be Futuristicp. 193
What Do the Arbs Say?p. 193
Declining Your Advancesp. 194
Does the Market Have Bad Breadth?p. 194
Making It Cumulativep. 194
A Tick in Your Armsp. 195
Making Us All Tickp. 195
Arms Strengthp. 195
Strength Is All Relativep. 196
Relative to What?p. 196
Are We Relatively Strong Today?p. 197
Do I Have to Go to the Gym?p. 197
Getting Sentimentalp. 197
A Sentimental Journeyp. 198
18 Getting Really Technicalp. 201
Nestle's Data Crunchp. 202
Not Just for Decorationp. 202
Timing Isn't Everythingp. 202
Pick Me a Few Good Onesp. 202
Keeping It Simplep. 202
The Art of the Chartp. 203
What Are We Looking For?p. 203
The Long and Short of Itp. 203
Compare and Contrastp. 204
Smoothing Out the Bumpsp. 204
Fast Lane, Slow Lanep. 204
On with the Showp. 205
Strength Is All Relative, IIp. 205
RSI in Your Eyep. 206
Mighty 'Mop. 206
At Home on the Trading Rangep. 207
Everybody Over the Wall!p. 208
Stochastics, Anyone?p. 209
Higher Highs, Lower Lowsp. 210
Say, What a Cute Patternp. 210
Head and Shoulders Above the Restp. 210
Love Trianglesp. 211
Little Round Tops (and Bottoms)p. 212
Cups and Handlesp. 212
The Trend Is Your Friendp. 212
Moving with the Averagesp. 213
Crossoversp. 214
One More for the Roadp. 214
A La Carte Menup. 215
In a High Enough Windp. 215
Fall into the Gapp. 216
Just in Case You Want Morep. 216
Free Chartingp. 217
And Not Freep. 217
In the Bookstorep. 217
19 Games People Playp. 219
Market Makers Are People, Toop. 220
The Human Factorp. 220
Brokering and Dealingp. 220
As a Brokerp. 220
Deal Me Inp. 221
And They Are Also Day Tradersp. 222
Fine Used Carsp. 222
Must We Always Compete?p. 222
You're One of the Crowd, Nowp. 223
The Market-Maker Card Gamep. 223
Drawing for an Acep. 223
Is This Guy Bluffing?p. 224
Straight, Flush, or Pair of Deucesp. 224
Hand #1 Capturing the Spreadp. 224
Hand #2 Playing the Marketp. 225
Hand #3 Wild Cardsp. 226
Hand #4 Bluff Handp. 226
Finding the Poker Facep. 227
One or Manyp. 227
The Spread Catcherp. 227
The Market Playerp. 228
A Man with an Axp. 229
The Blufferp. 229
Let's Return to New Yorkp. 229
What's the Difference?p. 229
Get Out Your Magnifying Glassp. 230
Hitting Your Limitsp. 230
20 A Piece of the Actionp. 233
Steady as She Goesp. 233
Chasing the Spreadp. 234
Uh-Oh. Time to Sell?p. 235
Is There a Man with an Ax?p. 237
Getting Clockedp. 237
Oh, Baby. It's Getting Worsep. 238
Whew. Glad That's Overp. 239
What's Going on Now?p. 239
Clocking Inp. 240
On Our Wayp. 240
Part 6 Developing Your Own Day-Trading Stylep. 243
21 The Day Trader's Playbookp. 245
It's Never Pure and Simplep. 246
Without Further Adop. 246
Scalpin' Teeniesp. 247
How and Whyp. 247
Making It Workp. 247
Cutting Inp. 248
Gotchasp. 248
Best-Laid Plansp. 249
Down Broadwayp. 249
Meant for Momentump. 251
How and Whyp. 251
Making It Workp. 251
Gotchasp. 252
Best-Laid Plansp. 252
Down Broadwayp. 253
Filling the Gapsp. 253
What's a Gap?p. 253
The Day Trader's Playp. 253
Down Broadwayp. 254
Shadowing the Axp. 254
Is the Ax Sharp?p. 254
The Day Trader's Playp. 254
Down Broadwayp. 255
Is This Event on Your Calendar?p. 255
Down Broadwayp. 256
Tactical and Practicalp. 256
22 Getting Personalp. 259
No Two Day Traders Are Alikep. 259
Sciencep. 260
Artp. 260
A Question of Stylep. 260
Compulsoriesp. 260
Involved or Committedp. 261
Does It Make a Difference?p. 261
Style Pointsp. 262
No Pain, No Gainp. 262
Time Commitmentp. 263
Market Appetitep. 264
Fast Lane or Slow Lane?p. 264
The Day Trader's Dayp. 265
An Unalarming Beginningp. 265
The Morning Newsp. 266
Turn On, Tune Inp. 266
Ding ... And They're Offp. 266
Decide Your Daily Fatep. 267
Trade, Trade, Tradep. 267
Midday Breatherp. 267
Getting Ready to Closep. 267
Day Is Donep. 267
Aftermathp. 267
Personal and Practicalp. 268
23 Trading at the Speed of Thoughtp. 271
A Bigger Picturep. 271
The Day Trader's Trifectap. 272
A Question of Balancep. 272
Counting Your Chipsp. 273
Keeping Trackp. 273
Setting Aside Risk Capitalp. 274
Diversificationp. 274
Knowing When to Get Bigp. 275
Dealing Yourself Inp. 275
Five-Card Draw or Seven-Card Stud?p. 275
Choicesp. 275
Learn by Doingp. 276
Tool Catalogsp. 276
Computer Considerationsp. 276
Practice Handsp. 277
Good on Paper, Bad on Paperp. 277
Going Backp. 278
Second Best for Awhilep. 278
In the Redp. 278
Staying at the Tablep. 278
Brain Trainingp. 278
Brain-Eye Coordinationp. 279
Learning How Your Brain Worksp. 279
The Future of Day Tradingp. 280
Online Investingp. 280
Another Population Explosion?p. 281
At Your Friendly Neighborhood ECNp. 281
After the Sun Goes Downp. 281
Day Trading Across Bordersp. 282
The NYSE Wants to Play, Toop. 282
Taking It Home with Youp. 282
Appendices
A Trading Termsp. 285
B Market-Maker and ECN Symbolsp. 291
C "Plain Talk About Online Investing"p. 293
Indexp. 303