Recross-over of the 8/34 For Buys (Sells are Reversed) The 8-day exponential moving day average crosses over the 34 exponential moving day average to the upside. Place a stop-loss below the 34 MDA and trail the stop up as it becomes profitable. For swing trading, look at the 34-, 50and 200-day moving averages. 47 48 49 Peak and Trough Reversal 50 Double Top 51 Double Bottom 52 Identifying Trends Market timers are great indicators, of course, but the trend is also measured more generally by the basic market indices: 1) Russell 2000 2) Transportation 3) NASDAQ 100 4) The S&P 500, 5) Dow Jones Industrial Average Additionally, be sure to pay attention to the Federal Reserve. The Fed supports interest rates in a variety of money and credit available to the market. The Treasury is also now a much bigger player in the market. Use daily commentary. 5353 Intraday Chart Example for AAPL 54 Intraday Chart Example for RIMM 55

Entry Strategy Only trade one stock at a time, unless youre hedging your position with a short On entry points, make a limit trade if the stock isnt moving so fast that you miss out on the majority of the change in price. I use a 20 33% rule. 56 Focus on the Trade Study the 3or 5-minute candlestick chart. For big decisions, consider the 3-, 5and 15-minute candlestick chart. For still bigger decisions, consider the Intraday 5 minute, 30and 90-day charts in conjunction with the above. Pay attention to the support and resistance lines. 5757 Exit Strategy The most critical part of the trade is the exit point. I use a simple rule of double the loss. First loss, best loss. Almost always use conditional alerts rather than a stop. We use a graduated 10/50 rule. Once you hit your gain level, manage the exit with a trailing stop or a conditional alert. 5858 Conditional Alerts (a.k.a. Stops) Buy and sell limit orders, as well as gain and stop

When you exit a trade, be sure to review and possibly cancel any conditional alerts you may still have in place. 5959 6060 Building Positions Are you a BMW type of trader Or, are you a PINTO trader? 61 BMW Trading (n) Buying More of a Winner Successful day trading is buying more of a winner (BMW) in a consistently moving market. Think of BMW as doubling down in Vegas. You do that when you have a good hand and are in a good position vs. the dealer. This is particularly important in swing trading. Paigow Poker 6262 PINTO Trading (n) Piling on like No Tomorrow Unsuccessful trading is buying more of a loser to lower your average cost as you pile on. History has shown me that about 40% of the time that I do pile on, I will make money. However, that other 60% of the time, when I have piled onto a loser to make a bad loser worse, I wipe out a weeks worth of profit or worse. Best Loser 6363 Remain Flexible!

Wait, Wait, Wait! Patience is an incredible virtue in day trading. Waiting a bit longer than you are naturally inclined is the single best way to improve most trades. 64 Mistakes Happen! All traders make mistakes. The general rule is to eat your mistake as quickly as you an, and get out of it. 6565 Take Your Profit! Winning a trade? Take your profit! Dont reassess completed trades. If you believe the market is still moving in your direction, use a trailing stop. Jack Nicklaus 6666 67 Take Time Out! Breaks are key, especially when you have Two losing trades in a row (brief time-out) Significant loss (at least 15 minutes) Break from trading Jack Nicklaus 6868 January 2011 3 4 5 6 7 Weekly Total 10 11 12 13 14 Weekly Total M-T-D P 2544.00 + 4835.00 + 6117.00 + 6238.00 + 133.00 + 2545.00 5 4860.00 + 2295.00 + 1053.00 + 3562.00 + 1425.00 + 13195.00 5 10650.00 10 TOTAL E + + + 3 + + + + + 5 8