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Corn opened. Traded down continuing die momentum of tfic previous ricy. and thon closed on the Inigln ot the opening bar, That action created a reversal bar. Prices were correcting against Ifie previoLis down move, so I tried to seil a breakout of tfie low of tfie reversal bar. I coufdn4 get in, but when the next bar was in place. I entered an order to self corn on a breakout of the low created by ttiat bar. It was the second bar of the day. I was filled wilfi a ten lot on the next bar at a price of 24 , exactly where I had liquidated 1/2 my position the day before. Average volatility was 1 1/4 paints. I placed a MIT order to liquidate four contracts at 247 3/4 and placed nsy stop at 250. The market oioved down, but not to where I couid liquidate to cover costs. The lowest it went to was 248 1/4. The price bar that made tfie low was a doji, so 1 moved my stop loss to just above its high si 249 l,/4. I was stopped out there with a loss of $375 including costs. Hovjcver, the day was not yet over.

As prices corrected from Ihe low, I tried to sell breakouts of the low of each succeeding bar. I wanted to ptace an order to buy a tweFy tot at a breakout of the Ross fsook. I began counting tfie iViyher lows and then realized that average volatility was only 3/4 of a point. Thai meant 1 would have to liquidate fourteen contracts in order to cover costs. Since that was more than one-half my contemplated entry size, 1 had to forego entry at that point.

I had no other entry opportunities prior to the close so, once again it was time to totr up the dollars fur tfie day. Sad to say, but 1 was down $375.

Those results were typical of the way 1 trade witfi one exception: Wheis Im not trading for my writing, I trade Vvith more contracts. However, it shows the way trading is for rrie, I u.-jally stay Vvith a market until it gives me a win. \ dont expect to win every .series o( trades, i sintply try to stay in the water utnil a hig move comes along. I never know wlien a 1 move is nght around the corner.

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As s iQwn above, i was able gel cooni of ifiree to go shori a breakout of the low that made the third sagrjmg fiigh, Expecmilohs for prolit were too low - average volatility was between 1/2-3/4 of a point.

That meant I would have to liquidate more than half my position just to cover costs. I fiave a rule that if I have to liquidate more ihan half of rriv position to cover costs, I wili not take the trade.

The next day afforded an opportunity to explain a [ I adhere lo refigEOUsly I rver trade a gap opening on a daily chart where iho gap is outsrde of the previous days trading range. However. I will trde a gap on an intraday chart aher the open, as long as it is inside the daily range of the last three days,

Prices gapped down on the open, but still inside the trading range of ifie last three days. However, prices were threateriing to take out the entry signal of a breakout of the lowest low of trie last ituee days.

! got sfiort a ten lot at 248, which represented a breakout of the lowest low of the last three days [LL3D1. Average volatility was 1 point, That meant ! had to liquidate five contracts to cover costs. My slop was 1 point b:-\ck at 249. I never fad a chrnce to cover costs as prices iraded lirs: dovm artd then up taking out my stop at 249. I was down $750.

Prices opened the second bar of tfie day the same as live frst bai. If 243 vfas good for me to enter tho first time, then it was good for me to enter a second time. I got sfiort a twenty lot at 24 8, only this time, <second time through). il«e trade wns good.

I covt]red cosis wah a new average volatikiy of 1 That took eigfit

contracts. Two bars kiter, corn made its low for the day. When the next bar th:rned out to be a doji, I moved my stop to protect 1/2 of the unrealized [iriper profits in the trade. I protected 2 1/2 of tlie 4 34 ifiat hi-ul been made, I trier] to s<:ll the a breakout of the low of tfie doji bar as well as tfie low of Ifie day. whicfi vvas now a Ross hook.

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Wluin itie next l)rir took out ific fiigh of tfie <loji 1> , I nxitr close. It was a reversal bar. I gut hd of sixteen contfLicis at 24b for a goss profit of SI,800. From that I had to subtract the S70O t lost eadier thai day My not was $ 1,050.

had nnvv tradnd corn loruj to prove a f)omi. Corn ran sarressloliv be trided on a Thirty rmnute chart usioy $25 coTim.ssions aod feesma J.m how .niich, belter I can do with much lower direct costs

It IS important for every dayirader to attempt to obtain die lowest possible cos;s. They turn uj\ to be an enormous facto, on percentage basis every dnytrade taken,

S.rr,,l:Hly a IS vital ifai a daylr;jder solicit and secure tfie host poss.ble pxpnmon times 1o Co this, one musT knovv how to place orders [

hokera 1 IS qo-nq to Im a trader call the floor d that irac er fias not mas e ed lering. For a dfscussiort of the kmds of orders i typ.ca utili.e m rnabLcieu i . j ..... TrHinn Riiinpss. aval iibki from Trat

niy own traoinrb suggest reading MdmflJa Bminc ss availaljte ;m Traci-,na Educa[ors Ltd. For a very complete treatm.Gnt on ordering, I suggest obtaining ((ow to 1 13 . - This audio cassette jse and manual ar.~also"ava,!ahle through Trading Educators Ltd, You can call (512) 2 9 0727"or ax l51?) 2i39 0747 for information on flow lo order or write, Trading Educators Ltd., P.O. Box F-43527, Freeport. G.B.. Bahamas

Chapter 24

Tuniiig Day Trades into Position Itadcs

A very important consideration in my daytradirig i tfie ability to turn a daytrade into a position trade

Perhaps Ive traded position trades for too long. \ simply cannot resist the EempEaiion to nake the conversion.

For years tfie orily way I traded was to position trade. It seeris to me thai strictly daytrfiding leaves too much money on the tablo

If I have a winning position in a lutvjres contract, vvhy shouldnt 1 hold onto i( overnight? Isnt one of the oldest rules of iraciog lo "hold your winners?"

Over time I have corne to have an appreciadon for which daytrades turn into tfie best position trades.

I aitem[)t to fiold onto any daytuide entered as a result of one of my major entry signals. If I am in a daytrade when a major entry signal occurs, or enter one because of a major entry signal, I make every attempt to hold that trade overnight. IVly major signals are Hie breakout of a 1-2-3 high or low, the breakout of a Ross hook, the breakout of a leclge, or the breakout of a trading range.

Thoro is one intermediate term signal tfiat wifl cei.sse me to try io hang onto a trade and convert it into a positton trade. That signnl is if>e breakout of the lowest low or the highest fiigfi of tfie last three days. For purposes of conversion, that intermediate signal is the same as a major entry signal.

Once tho trade is converted, I maintain it as a position trade. As much as possible, I monitor and keep an eye cn tfie trade intraday, but I do not trade in and out of it on a daytrading basis. I try to stay in. Therefore, the only time I will try to hang onto a trade and convert it is if it meets one of the signals rucntioned, and is also in a profitable position at the tim.c I decide to hold.