Daytrading Newsletter
for Active Traders

June - July 2000  Vol. 4 - Issue 3
ISSN: 1529-7985

D A Y T R A D I N GN E W S L E T T E R F O R A C T I V E
T R A D E R S ========================================================

+ July 2000 Trading Results
+ How Daytrading Techniques Benefit Investors
+ Short-term Daytrading Strategies Pay Off
+ Simple Entry/Exit Strategy
+ Gain a Mental Edge - Overcome Mental Barriers to Success
+ The Dismal Scientist
+ Microsoft Outlook - Cure Worse Than Disease
+ Practice Safe E-Mail
+ Software Spotlight: StockVue 2000
+ Recommended Trading Books
+ Annual Trading Results through July 2000
+ How to Subscribe/Unsubscribe

============ July 2000 Trading Results to date

Our current net profit for July 2000 is $10,325 including slippage and $25 per roundturn commission. 87% winners, with no losing days and only a $825 drawdown. Join us.

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============ How Daytrading Techniques Can Benefit Investors

Whatever happened to the work ethic of our forebearers? Great minds of the past such as P.T. Barnum, J.P. Morgan? Men who made their money the old fashioned way, "They earned it."

TRADING: HARD WORK + DISCIPLINE = SUCCESS

Today's mantra: "Get rich quick," "Easy money," "Who Wants to Be a Millionaire?" Who is not sold on the idea of something for nothing? Game shows are popular as they cater to the idea of easy money; just answer a few trivia questions, "Hey, I know that one," "I could do that." It gives the easy money mentality hope and a promise of a better life, without effort.

But people, please, take off your rose colored glasses and take a look around. This market has gone too far, too fast. Explore the possibility that the markets are still far overbought; Internet company valuations are out of control.

When we have so called "hugely successful" companies hemorrhaging millions of dollars every quarter, something is terribly wrong.

BUSINESS MODEL: NO PROFIT + HIGH COSTS = TROUBLE

How long can a company continue to lose money yet stay in business? We may soon find out. Case in point, Amazon.com, whose business model is based on selling goods at less than cost. I note that in the last 52 weeks, Amazon (AMZN) has gone from a high of 113 to a low of 32 15/32 with the current value (as of July 17, 2000) at 41 3/16.

Are you one of the Amazon stock owners who recognized the downturn and sold at a nice profit somewhere around 113? What about 95? 87? Anywhere? This is where learning short-term trading strategies will pay off for longer-term traders.

============ Short-term Daytrading Strategies Pay Off

Don't be afraid to take a profit. When prices are high, greed takes over. Many say, "If I take a profit and it moves higher, I'll be sorry. I'll be wrong. I'll have lost money." No! Wrong message. Change your self-talk to, "If I take a profit, I'll have made a profit." The idea is to make money, not just to be the proud owner of stock certificates. Counting money you never had is foolish. Playing the "what if" game is a waste of time.

Concentrate on the here and now. A popular financial magazine ran a recent article entitled, "Mistakes Investors Make." One "mistake" cited was taking a profit on a stock that went on to higher valuations. Taking a profit home is not a mistake. Longer-term traders and investors can greatly profit from daytrading techniques to exit at a profit. If you buy and fall in love with stocks such as Amazon or Microsoft, then sit watching as price rises to the heavens and falls to the basement, this is not a healthy relationship. Create a reasonable exit strategy. Take your profit, you deserve it and you earned it. Re-enter your favorite stock when it is prudent to do so and make money in the market.

============ Try a Simple Entry-Exit Strategy

Here is one part of a simple trading strategy:

Take the value of the highest high during the last 50 days and the value of the lowest low during the last 50 days. Average these two prices daily. When price rises above the line, buy. When price moves below the line, sell.

============ Trouble Following Through?

• What if you want to take profits, but cannot bring yourself to do so?
• What if you want to buy, but something stops you?

Review our Tips section on Pulling the Trigger.

Index to Tips

Pulling the Trigger

======== Gain a Mental Edge - Overcome Mental Barriers to Success

Kathryn Martyn, NLP Practitioner, offers "Mental Success Coaching." Designed to assist traders and investors in obtaining the proper mental processes to trade effectively.

1. Eliminate hesitation or second guessing.
2. Eliminate pulling-the-trigger problems.
3. Effective strategies to overcome limiting behaviors.
4. Adopt the strategies of successful traders.

Learn the mental processes necessary for trading the right way. Using simple NLP techniques, you can overcome your limiting behaviors and make lasting changes, usually in one session.

Contact Kathryn here for more information.

============ The Dismal Scientist

The Dismal Scientist® offering comprehensive and timely economic information, analysis, data, tools, and other features designed to keep you fully informed on the state of the world economy. Excellent, and "The Best Free Lunch on the Internet."

============ Tips, Tricks & Techniques for Daytrader's

Download our free E-book: Tips, Tricks & Techniques for Daytraders.
Just under 80 pages (excellent size for an E-book), you can read it on your computer or print it for easy reading.

This text fully describes our methods in successfully trading the S&P 500 with a small starting account ($30,000).

============ Microsoft Outlook - Cure is Worse than the Disease

Do you use Outlook 98 or Outlook 2000? If so, you are probably aware of the E-mail update patch that has been recently posted and is available for download. "This update limits certain functionality in Outlook," says Microsoft. This is putting it mildly.

The purpose of this patch is to disable Outlook's ability to receive most attachments directly in the e-mail. Plain text may be okay, but pretty much all other file types, including Microsoft's own Word and Excel files (many traders receive numerous Excel files), executable files .exe (such as updates and patches), html files, and the list goes on.

The idea is to halt the proliferation of E-mail viruses, but this time the cure seems worse than the disease. Once this patch has been installed (and it cannot be uninstalled) you'll no longer be able to directly open attachments that are classified Level 1 by Microsoft. You will also lose the ability to click a link in an e-mail and go directly to that page in your browser. Yikes! Suddenly E-mail isn't much fun anymore, is it?

Is there an option? Sure, don't install the patch and follow the safe E-mail procedures described below.

Read more from Microsoft: Outlook 98 Update: E-mail Security

============ Practice Safe E-Mail - Here's How

1. All e-mail from unknown recipients is trash: Suspect everything. Just say, "No." Ignore it and throw it away (empty your trash bin now and then too!).

2. Attachments from friends are suspect. Your friend may have a virus and not even know. Don't send each other cute executable files with spinning frogs in blenders. While they can be fun, it isn't worth it when a virus strikes. I received another attachment tonight from my sister, no message, just an attachment with a message, "FW: From an Online Friend." That screams virus. I will not open such an attachment, no matter what, so don't send them to me, okay?

3. Do not open any attachment you did not (a) ask to receive, or (b) fully expect.

4. An easy procedure which, if followed, would eliminate the attachment hassle forever: If you need to send an attachment, send two messages. The first says, "Here comes the attachment," and describes what it is. The second simply includes the attachment. This method, if followed, would eliminate the question of "should I open it?"

5. Install a virus package that checks E-mail. This can also be a hassle as you must continuously update the virus software (new virus are written every day), but most of us now lock our doors and wear seat belts (once also considered a nuisance).

A free virus protection that includes E-mail protection is AVG Anti-virus. Also, AnalogX Script Defender will intercept any file or script that attempts to run, or write to the registry, and alert you. You can then decide whether the source is trusted (you expected the attachment, perhaps) and choose whether to run it. Download for free. Here is a review of AnalogX Script Defender from the good folks at WebAttack.com.

6. Try a different E-mail program. While this will not solve the problem outright, most viruses are targeted to Outlook, simply because the majority of people use it. I've always used Eudora. I cannot keep up with the constant barrage of patches and updates from Microsoft.

Here are our favorite E-mail Programs

• Eudora
• Pegasus
• The Bat
• Calypso
  
  

============ Software Spotlight

StockVue 2000 Plus lets you track and manage stocks without paying monthly subscription fees.

Version 4.1 offers the following new features:

Palm VII
Internet phone support
Text-to-speech conversion
Microsoft Agent Character alert notifications
Real-time quote tab

StockVue 2000 Plus 4.1 -[http://www.stockvue2000.com is no longer working as of Aug. 4, 2001]

Visit TradersBulletin.com for all our software reviews and recommendations, plus computer tips. Your computer is a tool. Learn to use it.

============ Recommended Trading Books

Trading Systems and Methods is a reworked edition of Perry Kaufman's classic New Commodity Trading Systems and Methods. This new edition contains much of the valuable material of the original book as well as new sections on Expert Systems, Fuzzy Logic, Fractals and Chaos, Neural Networks, etc.

This book is a valuable reference that should be on every trader's or investor's bookshelf. We use this reference work often and recommend it highly.

Category: Daytrading
Trading Systems and Methods by Perry Kaufman
Price - $79.95 - Our Price $55.97

Books are the single best and least expensive way to learn more about trading.

============ Daytrader's Bulletin Real-Time Signals
Trading Results Through July 2000

June was a difficult month for most traders. Our cumulative net result up to and including July 18, 2000 on our model account is $36,125. This is a 120% annual return and includes the recent drawdown period.

These results are posted after each trading session (late evening) on page 6 of the Overnight Update and also can be viewed on our Cumulative Net Results pages at

Good trading,
Charles Holt, CTA
Publisher and Trader Daytraders Bulletin

Contact Info: http://www.daytradersbulletin.com/html/contact.html

============ Visit our Other Sites

Daytrader's Mentor - Private Daytrading Mentor
TradersBulletin.com - Kathryn's Computer & Internet Tips

============ Disclaimer

It is our sincere desire that our web site and Real-Time Signals service is an informative and educational resource for you as a trader. Please be aware that you may trade in front of us, with us, or after us and that it is imperative that you make your own trading decisions based on your specific risk tolerance and discretionary funds. There is a risk of loss in trading futures.