Daytrading Newsletter for Active Traders

Vol. 2 - Issue No. 3
June 1999

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Daytraders: Here is "What's New" at the Daytrader's Bulletin

* Easy Access to Most Used Pages - Trader's Home Page
* Daytrader's Mentor: Archives for Subscribers
* News Feed - NEW PAGE
* Trading Rules for Triangles - First in a Series
* Recommended Reading

================ Trader's Home Page
You've asked for an easier way to access favorite areas of our site such as the Real-Time Signals, Overnight Updates, Current Results, Mentor Archives, and more. We've created a simple, fast loading, Trader's Start Page for your personal use: This page is an example of the start page that our Real-Time Signal Subscribers may request for their own use. That's right, all Subscribers may have their own, personal and unique Trader's Start Page. You may then change the links to your own preferences and jot down notes as you please. You can change your browser's start page to this, or any other page you frequently use.

We have included instructions to change your start page via an easy link from the Trader's Home Page Subscriber's: Request your free custom home page right now:

================ Daytrader's Mentor - Archives
Subscriber's can access our Mentor Archives: All free trialers receive 1-3 issues of the Mentor Update during their trial. Previous Titles have included:

Climax Trigger
ADX Early Trend Detection
ADX End of Trend Detection
Using ADX for Counter-Trend Guidelines for the TICK
Plotting and Using Moving Averages and many more

These are sent via e-mail to subscribers and free trialers. If you haven't seen these, and it has been at least 90 days since your last trial, you may request a second free trial.

We've made many improvements and changes to our service since initiating our Real-Time Signals in April 1998. Many of these additions and changes have been suggested by our subscribers, and we want you all to know how much we appreciate your input and comments. Thank you for an excellent first year!

================ Headline News
Review up-to-date news headlines at any time: Updated every 15 minutes. There is a link to this News page off of our Trader's Start Page (see above). Use the software utility we previewed in our April newsletter - Double Desktop - and view a news feed, charting software and/or an order entry window (such as LeoWeb) while you are trading.

You'll find all our software utility reviews in our Trader's Tool Box: Software Utility for Traders

================ Trading Rules Series - Triangles
Starting with this issue we will present a series of Trading Rules. We find it useful to print a sheet with our trading rules, have the sheet laminated at our local copy center and keep it handy for easy reference while studying new patterns. Watch for these triangle patterns in your daily analysis, and review these rules to determine whether they appear valid for your own trading.

Rules for Triangles:

Small triangles (10% to 15% of preceding trend) - continuation
Large triangles (1/3 or more of preceding trend) - reversal
Symmetrical - continuation Ascending - upside breakout
Descending - downside breakout

It is better not to trade minor swings within a triangle unless the triangle is very large. As a triangle grows older, swings become more narrow. Profit potential shrinks, while slippage and commission costs grow.

1. To trade inside a triangle, use oscillators such as stochastics. This can help you catch minor swings.

2. In trying to decide whether a triangle on a daily chart is likely to lead to an upside or a downside breakout, look at the weekly chart. If the weekly trend is up, then a triangle on the daily charts is more likely to break out to the upside, and vice versa.

3. When you want to buy an upside breakout, place a buy order slightly above the upper boundary of a triangle. Keep lowering your order as the triangle becomes narrower. To short a downside breakout, place a sell order slightly below the lower boundary. Keep raising it as the triangle becomes narrower. Once you are in a trade, place a protective stop slightly inside the triangle. Prices may pull back to the wall, but they should not return deep inside a triangle following a valid breakout.

4. A valid breakout should have a burst of volume, at least 50% above the average of the past 5 periods.

5. When a breakout from a triangle is followed by a pullback, pay attention to volume. A pullback on heavy volume threatens to abort the breakout, but a pullback on light volume offers a good opportunity to add to your position.

6. If volume increases on a rally toward triangle's upper boundary, an upside breakout is more likely. If volume increases while prices reach lower boundary, a downside breakout is more likely. Volume typically shrinks as triangles get older.

7. When prices approach the last third of a triangle, cancel your buy or sell orders. Breakouts from the last third of a triangle are very unreliable.

================ Recommended Reading
For serious talk about Money Management, read The Mathematics of Money Management: Risk Analysis Techniques for Traders by Ralph Vince
On-line price $48.97 (save 30%)

================ 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

Good trading,
Charles Holt,
Publisher Daytrader's Bulletin