Trading Day by Day: Winning the Zero Sum Game of Futures Trading

Trading Day by Day is overflowing with the fundamental truths and reliable trading rules every trader needs to be competitive in any market, at any time. The three natural laws of trading, an intelligent approach and method, a sound mathematical system, the spike rule, the mistake rule, divergences, relative strength, the truth about options, businesslike money management, over a hundred “real time,” day-by-day chart examples, and much more.

Introduction:

WHY TRADE? TO make money, of course. However, for most successful traders there is something about trading that goes far beyond making money—something intensely personal. Trading the markets is essentially a competition, an intellectual competition. If you were to ask successful professional athletes why they play their sports, very few (if any) would say solely for the money. If you were to ask what motivates them, they would say personal pride, the challenge and, above all, playing well and winning. I believe the majority of consistently successful futures traders would say the same about trading.

It is the pursuit of excellence, not money, that motivates the exceptional individual. Only the mediocre are driven purely by a desire for money. It is an individual’s passion, not lust for money, that produces excellence. Nevertheless, trading is fundamentally a business, and the basic purpose of a business is to make money.

Trading the futures markets is similar in many ways to professional poker. In both trading and poker, money moves back and forth between the players while the “house” takes a small cut of each transaction. Both are zero-sum games (minus costs, of course). Both require a combination of science and art, a mixture of knowledge and intelligence. Both are highly competitive big-money games where a large amount can totally disappear and a small “stake” multiply many times over. Moreover, no true “player” of either game would bother playing for long if there were no money involved.

Trading is a combination of challenge, puzzle, game, and business. Therefore, a trader needs to be somewhat multidimensional—philosopher, scientist, game player, and businessperson—to be successful. A fund or corporation trading the futures markets can hire several people to perform these multiple functions, but you and I are “individual” traders and so must fulfill all of them ourselves. Consequently, accomplishing this complex task requires understanding, discipline, constant awareness, and the ability to act decisively when necessary.

So we are confronted with a tremendous challenge here: to become consistently successful futures traders. The first step in surmounting this challenge is solving an extremely difficult puzzle: the puzzle of price movement. However, only solving the price puzzle will not be enough; we will also need to “play” the game of trading correctly. Unfortunately, even this will not be enough because to survive and prosper in this extremely competitive business called trading, we will also need to be sound businesspeople. Obviously, being and doing all of this well at the same time is not easy, but if and when finally achieved, the rewards, both personal and financial, can be extraordinary.

Contents:

• Trading vs. Investing
• Approach
• Method
• The First Law of Trading
• The Second Law of Trading
• The Third Law of Trading
• Relative Strength
• Know Yourself
• Long-Term Trading Method
• The “Spike” Rule
• The “Mistake” Rule
• Streaks: Good and Bad
• The Commitment of Traders Report
• Options
• Paper Charts vs. Computers
• Price Action
• Charts
• Conclusion on Chart Examples
• Stock Charts
• Putting It All Together
• Common Trader Pitfalls
• Final Thoughts on Trading
• My Story, plus how Hillary Clinton “really” turned $1,000 into $100,000 in Nine Months
• Now, One Mor e Time

Trading Day by Day: Winning the Zero Sum Game of Futures Trading By F. H. Chick Goslin pdf