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36

The next hour didni bring much action, so I left everything in place

SB BG MIMUTE

J.

h -4

L ,

: i

0 B55

Bffi

B7S B?0 5

B55 B50 MS B4G 035 G3G 0Z5 BZO B15 BIO BG5 BOO

750 7B5 780 775

The third bnr of the day was a doji, so just above its iiigii.

SB 60 MINUTE

wrought my protective stop to

H

i i i I..... I I Li i I \\\ ; I I

6 7 10 II IZ 13 14 17 18 19 ZG Zl Z5 Z6 27 ZB 1

905 900 095 890 8B5 880 B?5 870 B65 855

stop

845 840 B35

830 8Z5 BZO 15 810 805 800 795 790 7B5 700



The last tiar of the day didn t do much, either, I goi out just before the close at 843.

SB 6e mnuTi

hotAP i s i

< out

67 10 11 IZ 13 14 17 la IS zi zi 2 i z

That completed my series of sugar trades on the sixty minute chart.

I hope ttiat, in looking back, my readers will see that this market was not particularly splendid in its actions. Taken as a whole, other than a one hour rising connector from one trading range to aiiother, the sugar market was moving sideways in a trading range!

Ive marked it off the congestion areas and shown (fiem on the oexi

page.

905 900 B% 890 8B5 888 B75 B70 865 860 855 B50 B45 840 835 B30 825 82Q B15 BIO 005 800 795 790 7B5 7B0

67 iO 11 12 13 14 1? IB 19 20 21 25 26 27 28 1 2

I suppose no book on daytrading would be complete unfess it included a full days trading in the S&P.

shov how I do that in the next chapter.

9 5 900 B95 BSO 885 880 875 870 865 860 055 BSO 845 B40 B35 830 825 020 015 81G 005 800 795 790 7B5 7BG



Chnplcr 26

I trackud this trade paying normal commission of $6 a round turn.

SA:1* FViiding

Wfinn [ trade ihe SSP. I do it on a five minute chart, Thiore is virUialiy no difference in the way I trade the S&P on a five minute chart and the way I trade, say, bean oil on a daily chart. J\\g only exception is that t will trade a gap open from one intradny liar to the next on the S&P, and will u.suolly not do so on a daily chart.

Out there is an enormous difference iri exccotion, I want to caution my readers or a numtier of ihings. lecause I have seen otherwise good traders destroyed by tradir"ig the five minute S&P.

Getting into the S£<P is iike stepping into the ring wilh a rattlesnake. You can be bitten quickly and when you least expect it. The S&P is fast, voltitile, and often does tiie unexpected.

If I were not trading at very low commissions and receiving excellent turnaiound r:allirig direct to the fioor, I would not dare to trade the S&P on a five oioute chaM, It is fr too dangerous. Besides, I would he competing directly With CTAs and off the floor professionals who are tmding trnder those conditions. Its better (o trade the S&P on a ton or fifteen minute chart if its not possilife to obtain low commissions and speedy turnaround.

Artoifier criteria is being fast on your feet. I must he a nimhfe and agile trader to trade the S&P on a five minute basis. Fortunately, my trading habits are so well ingrainrd that 1 trade correctly almost by instinct. My habit patterns are Ivell formed. I know, and know that I know I will follow my method and my plaiv If tht were not the case, I would be better off trading the S&P in a larger time framjc.

There is little time to tfiink. Reactions have to he virtually automatic.

I have no way of knowing how nientafly spry any reader of tfiis book might be. But again I varn you. irading the S&P is no place for the trader who is faint of heart, or one who does not have the capitaf to be in tfiis business. Certainly it is no place for the trader with a small account, one who can trade ony ? contract at a lirne or who is trading with money needed for living.

With tfiese warnings in mind. I present a typical day of S&P trading on a five m.inute chart. I intentionally chose a day when the market was not trending because I want to show that what 1 do will work intraday ii the SSP whether its trending or not. On the daily cfiart, I was trading an outside day following an upside day. Tfie outside day took place well within the bounds of an even larger (Jay that took place before the inside day. Those days took place at afroost dead center of what had been a trading range that lasted for five montfis. I also cfiose a day when I was not holding a seminar, and one on which I accepted no outside phone calls-

VVhen I trade the S&P, I do not even entertain ifioughts of hofding overnight. For rnc, it is stnctly a daytrade.

The day started down at the open, but within the trading range of the previous day. Tfie previous day had been spent rriostly in a long trading range, and fiad opened gap down fror the close of tfie prior day.

In tfiis cfiapter, 1 will take the concept Fve been sfiowiog a little bit further in tfint every time I connect two points. I will lefor to it as a segment.

Theres more than one way to use the concept of segments These charts should show enough for anyone to get the hang of it, and at the end ril show how to drop an old segment and pick up a new one. In segment counting, an inside bar is counted as part of a correction. Tliis differs from the concept shown in chapter 21, where 1 had to have three higher highs or three lower lows before I could enter the market,

SP 5 rtlNUTE

open

-<

37748 37725 37710 37695 37600 37665 37650 37635 37620 37605 37590 37575 37550 37515 37530 37515 37500 374 B5 37470

37155 37440 37425 37110 37395 373B0 37365



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