Take the Mystery out of Short Term Trading

By Richard V Rueb
May 2000

Take the Mystery Out of Direct Access Trading

By

Richard V Rueb
Stock Trader May 2000

Section 1 -- Philosophy
Have you ever wondered why college takes four years and graduate school takes two more? Why couldnt those academics just get on with it quicker? elementary stuff in a month or two why take four years? They could surely teach the

Im sure youve wondered but been

afraid to ask. Well, during the past three years, Ive discovered the answer. Pace! Pace is the special element that facilitates solid learning.

Traders new to the business want to learn all about trading yesterday so they can start active trading today! You cant learn it all in a day! Grasping all the complexities of the financial

markets will take you some time. This paper may be used as a roadmap for learning what you need to know. Taking the time to properly learn will possibly save your more capital than you can imagine.

The mind can take in a lot of data, but time seat time - is required for the assimilation of data into memorable and useable intelligence. Ultimately, knowledge developed from processed information can be converted to wisdom, and, hopefully, eventually employed as quick-witted instinct! This process simply will not occur in a week or two. It requires seasoning time! The

intellectual capital developed in advance of putting your wealth at risk will become the glue which will mold your trading plans into successful ventures to be looked back onto with future pride.

Traders are generally impatient people in a hurry to make more money! But impatience breeds failure and can be extremely hazardous to your wealth! What a novice trader needs to realize is that, regardless of how smart one is, the financial markets are complex and hard to learn.

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Forget about knowing everything. Its impossible! Just focus on whats pertinent to your chosen style of trading. However, if youre new to trading, remember you have not yet

developed your trading style. You need time, education and training to learn your own style. People spend six years getting a Ph.D. in finance and they are still not qualified to trade directly with the market; however, academia certifies theyre qualified to teach college courses.

As direct access traders, (there is a major distinction between direct access trading and regular internet trading) we have many advantages over those who dont know what we know; however, even though we have the added advantage of direct access to the markets, we still need the clearly developed knowledge from structured well-paced education to succeed. I call it TIQ Trader Intelligent Quotient.

Pace is required to facilitate education. Information should be gradually and repeatedly absorbed into our minds over time, in order for our minds to comprehensively grasp new concepts, and ultimately convert the information into knowledge. This is never truer than when youre dealing with your wealth. Structure and schedule are essential to control the flow of information facilitating the building block effect.

Curricula what is going to be taught needs to be sorted out in advance and provided by competent instruction at the proper pace and within the correctly sized pipeline so that all ingredients necessary for successful trading are indelibly etched into our brains before our capital is put @ risk.

I believe the minimum elapsed time for learning short term trading is six months and; therefore, beginning traders should remain in a state of supervised, governed training for that period! To get traders paying commissions, some brokers are reluctant to extend the training they control over such a long a period providing just what they think we need in a week or two! A week or a month is not enough time!

I know a broker who will not allow traders on their floor until a basic and advance course has been completed. Thats better than many; however, these combined two courses may be

completed in weeks elapsed time. Being all emersion training, there is insufficient time for knowledge absorption (seasoning) but its very profitable.

For the person with a typical IQ, developing you TIQ takes months not weeks!

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Im concerned that the Securities and Exchange Commission (SEC) and National Association of Securities Dealers (NASD) allow brokers to teach such complex information to new traders in a week (or two)! It doesnt matter how many disclosures brokers require new traders to sign.

Traders will sign anything! They want to trade! Simply put, nobody is smart enough to learn all that there is to know about trading the short-term financial markets in a week or two!

There is another important element for methodically learning this business. Attitude needs to be considered before launching into the trader curricula. Many short-term traders migrate into the business from an investing experience base perhaps 10 to 30 years of investing in mutual funds and/or 401k plans, so they come to the trading pit with preconceived attitudes, e.g., dollar cost averaging, double down, buy and hold, it will recover. These attitudes can lead traders astray.

New traders need to shift completely away from their historical investment paradigm (beliefs).

Investing values and trading values are at opposite ends of the financial knowledge/instinct spectrum. What we must do is shift our paradigm from investing to trading, even though it is very difficult to do. We dont dollar cost average! We never double down! We set stops and then execute them! Traders never await the price to recover. Traders move on. What happens to traders who dont keep their stops is they become investors awaiting recovery of their long term investment made as a short-term trade, gone south. This restricts traders from trading.

Section 2 -- Format
So forget all you previously learned about investing. As a trader, you are entering a new world, not just another subset of the investing world. Traders make the world go round! Investors

watch the world go round! You need seat time to learn how to accomplish this. It wont happen in a week or a month. It will take months of seat time focused directly on the important topics I will outline in the following pages. Youll make mistakes. We all do! Count on it!

Mistakes are acceptable as long as they are not fatel and are absorbed into the learning process. Mistakes made while trading one hundred share lots minimize the financial impact of mistakes while demonstrating the impact to the money pile. As you make the 100 share mistakes, just imagine the impact it would have been if 1,000 shares or 10,000 shares were involved. Trading is not a part time profession. It takes 110% of your focus and energy to succeed!

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The American university system has long used the structure of freshman, sophomore, junior, senior, graduate and post graduate to schedule and pace the appropriate basic information into the brains of young minds. At the same time U.S. military forces have mastered the element of repetition into their training curriculum to get the point across avoid getting killed or maimed while fighting the enemy. Being an old product of both those learning systems, I can attest to the functionality and effectiveness of their combined processes.

So many would be traders (who never make it) come to this new trading business thinking they are already seasoned business people. They think that they only need to be told what should be done once and, theyll be on their way to riches. Many are in spirit greedy, impatient teenagers and will probably blow their life savings before the war even starts or certainly, before they even know what the war is all about.

Traders need the same learning process as a military recruit who just arrived at boot camp. They need haircuts and discipline before they sit down and eat their first good meal! Lets see if we can get past this major learning barrier and insert some very important information into our thinking to subsequently convert into wisdom, which could mature into instinct.

Remember this: I am not the best trader, the most profitable trader, or the smartest trader, but I am here trading after three years, so I possess one important element staying power.

What I do know is that there are no comprehensive trader education centers around the country offering what is proposed here.

Structure
Every moving element in the system of the universe oscillates within a structure. My suggested structure for learning trading is packed into just six elements: basic trading, execution, momentum, chart analysis, leverage and trade planning.

Youre probably already thinking: those elements sound simple and generic. There cant be that much to learn about only six elementary focus points!

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Pace
How much time should a trader invest into studying these basics? Probably 10 years is not too much; however, lets be realistic. A month is not long enough and 2 years is too great a time investment for seasoned business people. After thinking about it, teaching it and studying the elements, I believe I have arrived at the optimum structured learning pace: six months minimum to one year maximum! Thats much longer than brokers want us to invest before paying trade commissions. Were not brokers but we need brokers and brokers need us

Once a graduate of such a course, youd be one lucky brokers client for life.

Instruction
Military training is compacted into 12-15 week immersion training segments, while college academia is protracted out to four-to-six years. Regardless, humans cant stand constant immersion instruction without structured time to reassess their scope and focus. One must respect the learning curve of any new science or art theyre thrust into.

My personal experience over three years of trading is one of intermittent learning and trading. People need breaks. My problem at the outset was that I did not have a visually clear picture of the knowledge I needed before risking capital. Remember, this industry is new made possible only by the recent access technology of the Internet. The content of my first course was information packed but, since I was informed of so much, I forgot far too much.

Caveats
Its extremely dangerous for traders in training to experience immediate success when first trading. Immediate gains serve as false euphoria and are a cancer that will kill your capital! A

false sense of accomplishment fuels the human ego into a feeling of euphoria. Euphoria is bad for traders. All emotion is bad for traders. Traders need to think while in their learning stage and then react in their application state. Traders need to experience several plateaus of the learning process before putting much of their capital at risk.

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Process
Remember this: There are two processes occurring simultaneously when learning to trade: education and training. Yes, they are distinctly different! Successful traders use technical

analysis to choose stock plays, apply instinct to enter and exit trades, follow momentum to pace entry and exit, leverage capital to maximize profitability, all the while executing a well planned trading strategy.

Once you know what you need to know about each of these elements, you will know how to get it and you will know whether the business is for you. It usually takes about a month to know whether the business is right for you. The business takes tremendous concentration.

Section 3 -- Curriculum
To understand whats needed, the six major areas where learning traders need to focus their education is detailed below. My recommendation would be to find six compacted weeks of

training spread over six months. Trainees will be practicing with structured drills of what they have learned in each successive class during the three intervening weeks between the six separate and distinct classes.

Brief of the Optimum Trader Training Curriculum

Trading 101 Trading 201 Trading 301 Trading 401 Trading 501 Trading 601 Month One Month Two Month Three Month Four Month Five Month Six Basic Trading Execution Chart Analysis Momentum Leverage Trade Planning

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Content
The trading college I envision would consists of 180 direct instruction hours accompanied by 720 hours of structured trading seat time + 600 hours of structured post market research for a total 1,500 hour investment. Thats a very serious six months! Most people probably wont want to work that much or that hard so the college would probably go broke awaiting willing students!

Minimum elapsed time is six months a maximum of twelve.

It would not matter whether

students complete it in six or twelve months. Its entirely up to the individual to determine an appropriate pace with the proviso that the college be completed within a year. We believe any more than a year would be counterproductive to pace because the synergy of focus would be diluted.

Instruction should be provided by competent traders teaching what they know how to do. Not every trainee will get it and there will be washouts. This college would not graduate traders who dont possess the basic aptitude needed to trade just like you cant graduate flight school unless you cut it in the cockpit.

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Summary
There you have it my vision of the optimum learning environment! In the best of all worlds, renowned instructors from across the trading community would strive to become a member of the faculty. I am personally acquainted with several eligible professors; however, Im looking forward to being introduced to more because such a college would need about twenty. The main

campus of such a college would be located centrally for easy air travel, reasonable lodging and food and some leisure attraction.

I dont know how much the tuition would be for a college like this; however, I wouldnt expect it to be cheap. Graduate schools charge $50,000 for an MBA. Proficiency in trading could be worth far more! What would make such an educational opportunity unique are competent

instructors with superior trading/training proficiency. I would want the instructors to teach only that particular subject matter in which they excel by demonstrated expertise as proven by documented trading records and/or high student evaluation ratings from structured critiques. In the financial markets, there are successful traders who average > $5,000 an hour using optimum capital and well-balanced leverage. Few individual earners can lay claim to such achievement!

New traders keep asking me how much capital is needed to trade. My recommended trading account size is $30,000 to $50,000 never any more. As your trading account exceeds $50,000 pay yourself by ordering withdrawals from your broker. Recently, a master trader showed us how to convert $10,000 into $300,000 in just 5 short months all the while reducing his account size by taking substantial weekly withdrawals. What this trader demonstrates is that its possible, even during volatile market conditions (March to June, 2000), to convert $10K to $50K in very short order and keep on growing it while protecting the initial investment as well as gains simply by removing large chunks from constant risk.

Another special benefit of a college like this would be the camaraderie interaction with fellow trading students would build. It is proven that bonding is the glue that sticks people together and helps people stick to their chosen paths. I would recommend all new traders join

DayTradersUSA.com in order to network with experienced traders. Experienced traders should offer their expertise as DTUSA Mentors.

The following outline and discussion provide an introduction to my envisioned curriculum structure:

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Optimum Schedule Overview

Trading 101 - Month One - Basic Trading Week 1 Rigorous basic trading training (breadth) Week 2 Simulate Instructors Precision Drills Week 3 Get connected to high speed bandwidth Week 4 Establish Multi-Monitor Home Trading Station

Trading 201 - Month Two - Trade Execution Week 5 2nd week - In Depth Trade Executions Week 6 Employ Instructor Defined Trading Regimen Week 7 Practice Various Execution Skills Week 8 Simulate Instructors Precision Drills

Trading 301 - Month Three - Using Chart Analysis Techniques Week 9 3rd week - Analyze Technical Indicators Week 10 Employ Instructor Defined Charting Analysis Techniques Week 11 Follow Instructor Provided Technical Analysis Drills Week 12 Begin trading 100 Share Lots

Trading 401 - Month Four - Momentum Interpretation Week 13 4th week - Interpretation of Momentum Action Week 14 Employ Instructor Defined Daily Research Regimen Week 15 Master Interpretation of MM Behavior & Momentum Week 16 Continue live trading 100 Share Lots

Trading 501 - Month Five - Trading Leverage Week 17 5th week - Understanding $ Leverage Week 18 Employ Instructor Defined Leverage to Improve profitability Week 19 Limit to learning only 10 Options Strategies well Week 20 Begin trading 200 Share Lots

Trading 601 - Month Six - Trading Style Plan Week 21 6th week Develop Trade Strategy Plan Week 22 Convert knowledge to wisdom Week 23 Trader IQ - Test your knowledge Week 24 Begin trading 300 Share Lots Indefinitely Week 25 Graduate from College

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Section 4 -- Narrative
The discussion below is available to the public. It details the general structure of the 180 onehour- classes delivered in one-week (30 hour) segments each month for six months. The actual curriculum is proprietary to the author. In the 1 week of rigorous training the trading student will be exposed to all elements of direct access trading, warned about all the caveats, introduced to various execution methods available for NASDAQ and NYSE, instructed on interpretation of Level II momentum, provided a roadmap of various alternative chat and advisory services, told about the 300+ web sites that are available supporting the financial markets, introduced to primary technical analysis, provided an overview of the use of leverage (options), pre-tested on knowledge of the financial markets, informed of the distinction between internet brokers and direct access brokerages, schooled on the mechanics of available multiple brands of direct access software and post tested on what they learned during the week. Following each week of in-house training, students will be provided a detailed roadmap of drills and exercises to practice all the elements of what they were exposed to in the prior week of training. They then have (at least) three weeks to practice everything they learned in the
st

preceding week of in-house training. The post course precision exercises developed by each weeks instructors are an integral element of each of the six education levels. While the detail is proprietary, students may be assured that, when followed, these exercises will enable them to cement the information presented in prior the week of in-depth training. For the student to assure a grasp of the

information, these exercises need to be practiced over and over during the three intervening weeks between classes according to the plans provided by the instructor. Students will learn and relearn, so retention will be elevated from the average of 10% to 70% (gross estimates). The object of the precision drills is to establish a structured environment to facilitate the instrumental conditioning so crucial for students to continue learning the material covered once they leave the classroom. An important factor in trading from home is to be connected with the bandwidth equivalent to that available to professional traders at the trading floors around the country. The college will assure, as part of the tuition, that students are properly equipped, connected and trained on the use of all of their intellectual trading tools as well as physical equipment. 'Computers are computers' is not entirely true. In the vision of the college, a trader's work station is the total professional collection of many components, not just the computer, from saved favorites of all important websites, lists of

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stocks available for shorting, the names of market makers, to all the networking ingredients of the traders 'system' including a glossary of financial terms... right down to conversion charts from decimals to fractions. Such a college would support a 24-hour a day help desk to answer all the trading related questions students need to ask while in training.

Trading 101 - Month One - Basic Trading Week 1 Week 2 Week 3 Week 4 Rigorous basic trading training (breadth) Simulated Instructors Precision Drills Get connected to high speed bandwidth Establish Multi-Monitor Home Trading Station

Following three weeks of home exercises, the student returns to class for the 2

nd

week of

instruction on one of the most important elements of direct access trading execution. This week begins the second month of training. Without trying to teach it here, just remember there are a myriad of methods for executing trades in the financial markets. Traders need to learn how to do it instinctually. This weeklong instruction block followed by another three weeks of practice drills will enable the smooth execution of entry and exit.

Trading 201 - Month Two - Trade Execution Week 5 Week 6 Week 7 Week 8 2nd week - In Depth Trade Executions Employ Instructor Defined Trading Regimen Practice Various Execution Skills Simulate Instructors Precision Drills

Its clearly my opinion that you cant trade intelligently without the use of technical analysis. Thats why youll be discouraged from trading with large share size until youve mastered chart interpretation through technical analysis. Everything you need to know about a particular stock is reflected into its price chart. Until you have mastered the elements of execution, theres not much point in confusing you with technical analysis. Now, at this point in your learning cycle, it is time to start grappling with the complexities of technical analysis. You would now need to learn how to identify support and resistance, use relative strength index (RSI) Stochastics, MACD, Fibbonacci Ratios, bull flags, triangles, up trends, down trends just to name a few. But, above all,

remember the import of the most basic of all technical analysis: support and resistance. Learn this early in your education.

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Following another three weeks of practicing the identification of momentum and executing small 100 share lot trades, you will return to the college for your fourth block of training on technical analysis. The actual introduction of the various elements of technical analysis would have been scattered through the weeks preceding that subject, e.g., Bollinger Bands, Elliott Wave, Stocastics, RSI, MacD, Fibonicci Lines, volume, etc.

Trading 301 - Month Three - Using Charting Analysis Techniques Week 9 Week 10 Week 11 Week 12 3rd week - Analyze Technical Indicators Employ Instructor Defined Analysis Techniques Follow Instructor Provided Technical Analysis Drills Begin trading 100 Share Lots

After another three weeks of home exercises, students return to class for the 4th week of intense instruction on what I label momentum. Momentum entails all the elements of Level II screens and market maker behavior. By the time you reach this point in your curriculum, Level II and market makers will be well known to you but you will probably not yet fully understand and appreciate all of the nuances on this, one of the most important elements of direct access trading. During this training week, you will reach in-depth for all the elements of trading involving Level II. You will learn how to identify momentum and, even more importantly, the lack of it.

Trading 401 - Month Four - Momentum Interpretation Week 13 Week 14 Week 15 Week 16 3rd week - Interpretation of Momentum Action Employ Instructor Defined Daily Research Regimen Master Interpretation of MM Behavior & Momentum Continue live trading 100 Share Lots

The fifth week is when students will be exposed to the use of leverage. Leverage within the financial markets is achieved through the use of options. The use of options provide traders with tremendous borrowing (buying) power. I dont advocate the use of borrowed funds to trade stock; however, leverage is an extremely important factor in capital growth. You would not go away without knowing how to control the tremendous risk when using options. I recommend you avoid the use of options until you have completely mastered trading the underlying stock issues successfully. With options you can control much larger blocks of stock than with holding the underlying stocks. There are at least 25 different strategies for the use of options; however,

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thats too many to master. You need only 5 sound primary strategies and 5 secondary strategies to employ sound use of options. Learning 25 strategies would boggle your mind.

Trading 501 - Month Five - Trading Leverage Week 17 Week 18 Week 19 Week 20 5th week - Understanding $ Leverage Employ Instructor Defined Leverage Techniques Limit to learning only 10 Options Strategies well Begin trading 200 Share Lots

The final week students will learn how planning trades and then trading their plan reduces risk. Remember that during each of the six separate weeks of in-house training they will not only review prior material covered; but would preview material to be covered in future weeks. As you can see from perusing this schedule, Ive limited trade share until this last week when we feel students may be ready to try more. Try 200 only if you are trading profitably with 100 share lots. Remember to ignore the cost of commissions for small share size lots while in the learning mode. I know it will be difficult to remember because you will want to make more, but please listen to this advice. You will be glad you did! Commissions are just another element of tuition like the gasoline to operate your car.

Trading 601 - Month Six - Trading Style Plan Week 21 Week 22 Week 23 Week 24 6th week Develop Trade Strategy Plan Convert knowledge to wisdom Trader IQ - Test your knowledge Trade 300 Share Lots Indefinitely

This curriculum is designed to be cumulative. Just remember that not only is there so much to learn, there is also so much you with which you must keep constant track. At the risk of repeating myself, trading is a full time profession in which you must remain constantly focused. If you are not constantly focused on it, you will lose. If you dont feel like trading, play golf.

The final thought: Have you ever pondered the rigorously constant vigil that FAA agents apply to the skies to maintain airline traffic safety? Just think of trading the financial markets as equivalent to that vigil because thats what youre in for!

Dont trade unless you want to!

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Richard V. Rueb is currently Executive Director of www.DayTradersUSA.com. He is also an active directaccess short-term trader with three years of experience. During 1999, he was affiliated with the Online Trading Academy as their Boot Camp instructor. Previously, Richard was the Executive Director of the Information Systems Security Association (ISSA) from 1987 to 1992 where he grew their membership fivefold. DayTradersUSA provides active traders the essential networking needed to survive in a most challenging profession. It has a well-developed education and training program offering short-term traders around the world the window to which they focus their learning.

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Section 5 -- Personal Notes

My own learning curve began in 1993 with investing in wireless technology like Inter Digital Communications (AMEX: IDC) and Qualcom (NASDAQ: QCOM). Riding QCOM from 28 to 85 in 93 was a blast! In 1997, when I shifted from retail brokerage to eTrade, trading @home alone regularly, I immediately recognized three very important factors impacted my success: access, education and camaraderie. Initially, these barriers were pesky but soon became a source of concern a mystery to solve. Access to the markets was improved by online trading; however, I wanted to network with other traders and needed more knowledge. Ive finally solved the mystery and have shared the solution with you to minimize your.

While eTrade provided what I believed at the time to be a comprehensive web environment to buy and sell stock, I knew something was missing. I wasnt sure what, but I was missing something trading at home alone. I wanted more!

An important factor to remember is that most online brokers are not direct access brokers. Active traders definitely need direct access to the markets for reliable trading and certain brokers specialize in providing this access through software, which will be installed on your trading home trading station.

I was imagining an interactive coffee house attracting people interested in the financial markets, where there were three-to-five Internet connections for customers to buy or sell stocks or options after discussions with the other traders. At that time, I hadnt yet grasped the vast resources of the Internet. All I knew for sure was that I needed to be better connected! Now that Im connected, I can remember how I felt it was like I was in the dark. The intention here is to shine a little light on the topics you need to grasp in order to carve out your path in this trading maze.

After some research, I was thinking there wasnt any structured learning center for what I wanted to know... We saw an ad in the local paper depicting a row of traders lined up in front of computer monitors. I followed the lead to a company in Irvine, California, less than ten minutes from my home and learned that those computers were direct trading stations. Further investigation indicated there was a month long course offered on direct access trading with a money back guarantee. Well, I registered right then for the Online Trading Academy (OTA), www.onlinetradingacademy.com course and stepped into a whole new world.

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The New World was an exciting place indeed! In California the financial markets open very early in the morning but eager traders adjust their lifestyle and are reinvigorated as the sun comes up each trading day.

The course taught me many elements of my new business. Now I had access; however, I was still faced with far too many unknowns. Still craving education, I began to scourer the countryside for advanced education and little was available... All I found were more elementary courses from different brokerages. During the OTA course, the school CEO, John ODonnell, pointed me to an organization that meets regularly in Irvine called DayTraders of Orange County now http://www.daytradersusa.com/ (DTUSA). I attended my first meeting while I was still in the OTA course and that is where my education continued bi-monthly ever since.

Ive learned something new from traders at every meeting!

After two years and 50 meetings later, I was asked to serve as the Executive Director of www.DayTradersUSA.com. It was a no brainier for me to accept the position and immediately launch an expansion drive to incorporate local meetings throughout North America chapters and eventually worldwide.

Remember this:

DayTradersUSA.com, Inc. is the place where the experienced help the less experienced get better experienced.

I then started sorting out the mysteries of trader education. Ive gradually solved most of the ones that were cob webbing my brain during the first six months following the completion of my OTA course.

Say let me clear the air here. Everything a trader needs to know was covered in the OTA course. My instructor, Fernando Gonzales, who has since written a good book on trading, Strategies for the Online Day Trader: Trading Techniques for On-line Profits, was excellent and told us what to do, how to do it, when to do it and left nothing essential out of the equation.

Its just that Im a little dense! Not all the material that Fernando tried to teach, sunk in, so it could immediately be applied at least not by me. I, probably like many new traders, violated many rules, advice and counsel he provided. It was probably those violations that prompted my desire

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for more education. Every time I made a losing trade, I realized that I had not been instrumentally conditioned. The teacher had tried to teach me, but because there was just so much to cover, it was not drilled into my head.

I said to myself, youve just learned a new business Richard! You cant know it all! Not yet! Its only been a month or two since you started learning all this new stuff. How can you expect to be profitable? But youve whacked your trading account by a third! A third of the money you worked so hard to earn and pay taxes on is now gone! What are you going to do quit?

I never once considered quitting! I just searched for advanced education, which wasnt there. What I did find, were the very helpful bimonthly DayTradersUSA.com meetings and its regular networking.

On alternating Saturdays Id attend the DayTradersUSA.com meetings with a positive attitude and confidence Id learn something from networking with other traders and/or from the meetings speaker. Even today, I continue to learn something valuable at every DTUSA meeting.

But that wasnt enough. I wanted more more substantial education!

About nine months after I began direct access trading, I prepared myself to teach the boot camp at OTA by assisting the instructor and then taught some courses. Teaching helped me convert a lot of the information Id gathered into knowledge. Now, all I needed was a couple more advanced courses to help me convert my vast knowledge into trading wisdom so Id never again suffer a significant capital reduction. I knew thered always be losing trades so, as long as I didnt lose much, Id be OK.

Following a presentation I gave on capital preservation for the Orange County Chapter of DayTradersUSA in June 1999, I did not trade for months while I perceived and organized the optimum curriculum, schedule and pace to effectively facilitate proper trader education and training. I was still searching for competent instructors who would provide that advanced element of wisdom I so desperately craved.

Fortunately, by the time I put trading on hold, I had made some successful trades that put my capital back into the green but I was afraid to put it @ risk again, before I found additional education. Well, my search was complete when I found the education I needed in the form of two separate short courses offered by colleague members of www.DayTradersUSA.com: Tony Oz,

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author of Stock Trading Wizard. Tony, www.stockjunkie.com, taught me how to select low risk high reward swing trades. Ray Grant, known as The Ninja, www.oscillationtradingco@home.com taught me the value of technical analysis for day trading. With this newfound information, I regained confidence, opened an account with my friend, Kevin Britko of The Day Trading Company, www.daytradingco.com began trading profitably with greater consistency.

It was only then that I was starting to draw the picture of the optimum trader education system. With my new found confidence and my trading consistency, I realized my trading account was a little shy of the needed capital to take positions in the higher priced stocks where the best risk to reward ratio lived. Id heard about options early in the game but had deliberately avoided embracing the huge learning curve associated with grasping all the option strategies available in the financial markets. Basically, what options provide is money leverage and risk minimization. Youve heard the expression no wine before its time well, now it was time for me to learn options strategies.

The stage was now set. Its three years into my trading career and I still have money with which to trade only because I learned a few elements of wisdom from all my trading mentors.

My most recent learning experience was facilitated by www.eGoose.com while I learned even more about swing trading following their newsletter augmented by their live trading chat room. Dan Gibby, President of eGoose, has introduced us to leverage using stock options strategies and teaches the courses in affiliation with DayTradersUSA.

With leverage added to the trading arsenal, all one really needs is a truly refined trading plan. The only way to properly develop a trading plan is to neatly maintain the many trading records of all your activity since you began trading. Keep accurate records of all your trades as your expertise develops. I maintain a three ring binder with 31-day dividers. Some months it requires a two-inch book and in others I need a three-inch. While Im writing this paper Ill probably get by with a one inch because Im not trading as actively.

Now you know what I know and, based on my own learning curve experiences, why I created the optimum trader-training curriculum with the structure disclosed here!

Please put it to good use!

Richard V Rueb RVRueb@home.com

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