You MUST follow these RULES if you are to survive as a new Rookie Day and/or Stock Trader. As a ROOKIE Day and/or Stock Trader the odds of you being successful are totally against you. Your chances of even "breaking even" are slim to none "IF" you do not approach your new career in a calm, conservative, systematic and diversified manner.

It's extremely important you follow the guidelines and RULES we have outlined below to insure your new career as a Day and/or Stock Trader as well as your Stock Investments are not short lived!

Please take the following Day & Stock training and advice to heart....

The general THEME of this lesson is as follows...

When you understand this you will survive as a new Rookie Day &/or Stock Trader!

Most Rookies have the URGE to jump right in the first few days and start trading using real money because they see the veterans of our organization making money. It looks easy but they do not understand the reason the veterans are making it look easy. The KEY to a veteran's success is they took the time to learn how to trade using our trading techniques, systems and strategies by following the RULES outlined in this lesson...

We will guarantee if you DO NOT precisely follow the rules in this lesson you will not survive!

Many times a ROOKIE will jump around from one trading system to another (grass is always greener on the other side of the fence) only to discover the first trading system they chose was the best. Normally they are out of money by the time they determine this so follow this very important rule...

What is typically called "Paper Trading" is either writing down a stock you would consider trading with real money on a piece of paper determining the entry and exit price or better yet entering them into your broker execution simulator...

This exercise will acquaint you with your broker execution program as well as establish and become familiar with the type of stocks in the day and stock trading system you want to use…

A. Select the stock(s) and either write them down on paper or enter them into your broker execution simulator.

B. Make sure you enter the trade using "Stop Loss Orders" and any other type of trading procedures you normally would use as if you were using real money.

C. Multiply this trade by the number of shares of stock(s) you would normally buy.

D. Paper trade or use your broker execution simulator for about 2 to 3 weeks or until you are at least 75% proficient.

IMPORTANT - Do NOT move to the next step until you have paper traded for a minimum of 2 weeks or are 75% proficient!

What you will discover is actual Day Trading (with real money) is MUCH harder and DIFFERENT than Paper Trading with a simulator. Now you are dealing with your hard earned cash and you are emotionally involved.

Each time you press the button to buy or sell you have to strike a reasonable balance between FEAR and GREED.

A. Initially trade in quantities of not more than 100 shares and do not, for the first 20 executions, trade more than 20% of your capital until you hit a 75% proficiency rate, then keep moving your shares up 100 at a time until you then again obtain the same 75% proficiency rate.

This way you will build confidence. You will get a feel on how easy it is or is not to catch an order. Always remember the simulator will most always catch an order at your intended entry level. The REAL broker execution program does NOT!

True you may NOT make much money on your first 20 trades and in fact you may lose money after you pay the broker commissions but what you will learn with this very important lesson is...

"You Must Experience & Learn First Hand How Using Real Money With The Actual Broker Execution Program Works" with the LIMITED RISK of only 100 shares"!

One wrong click of the MOUSE with 1,000 shares could cost you thousands of dollars - one wrong click of the mouse with 100 shares maybe only $100...

Another way the Rookie Stock Traders loses money is buying stock at "MARKET" price! You must learn the difference between MARKET & LIMIT or you will lose money as a Rookie!

A Market Order is the best price the market will bear. If ABC is moving up fast and there are no other shares available from the Market Makers at 7 then your broker execution program will buy the shares at the next best market price, which may be 7 1/16. If ABC is really moving you could end up buying ABC at 7 1/2.

Let the stock trend down just below your intended BUY PRICE, then place your BUY STOP ORDER at your intended entry price. If the stock keeps going down you will not buy the stock. If it moves up, you're locked in with the stock NOW TRENDING UP!

DO NOT BUY using MARKET! It is too risky. Always use a LIMIT order. This is an order that says I want to buy 200 shares of ABC at 7 and if you can’t sell it to me at that price FORGET IT! I won’t buy ABC at ALL!

The most difficult part of Stock Trading is taking a loss. You will have to learn how to take losses (don’t think you will not lose money on a trade because you WILL)! Remember this – YOU WILL LOSE ON ONE OR MORE TRADES! We are now going to teach you how to take a loss on a stock which turns against you within a few days after you bought it. If you do not follow these instructions you will fail as a Stock Trader and possibly become an investor, hoping the stock goes back up in the weeks or months to come. In fact it may never go back up.

At the beginning you will miss a lot of GREAT PROFIT OPPORTUNITIES and become very frustrated seeing those stocks run for 1 to 10 points. DO NOT give up or deviate from this rule as eventually you will learn how to catch those fast moving stocks!

If you have determined your entry and initial execution price is $20 and you have missed that price using a "LIMIT ORDER" DO NOT FOLLOW A STOCK UP PAST YOUR INTENDED EXECUTION PRICE!!!

There are exceptions and as you learn how a stock moves and reacts to what is called a "Break Away" you may be able to add 1/8 to 1/4 to that entry point but at the beginning "You Must Stick To This Rule Of Not Chasing A Stock"!

IMPORTANT

If it's easy to catch a stock chances are it will FALL. The odds say, as a rookie, if your first few clicks of that mouse does catch a stock you probably have bought it at the TOP of a move and it will FALL. Be ready to take a small loss and move on.

Early Morning Momo Plays can offer some nice gains in a matter of minutes - if you know how to trade them...

Rookies should NOT consider these trades until you are at least 75% proficient with a simulator - then only trade 100 shares at a time using real money ...  study the following TIPS...

RED indicates SHORTING opportunities and Rookies should NOT SHORT until they better understand this technique!

If any one of the following three Indicators are WEAK or DOWN (in the RED) do not trade... DOW Jones - NASDAQ - S&P 500 Futures - sit back, relax and LEARN!

In other words if the market or a stock is trending down DO NOT GO LONG on a stock. If the market or stock is trending Up DO NOT SHORT a stock. The odds are against you if you "Go Against The Tape"!

Capital set aside for Housing, Food, & Day-To-Day necessities should NOT be considered for trading!

This rule is more for those who choose to build and hold a stock portfolio over-night. No more than 20% of your funds into one stock!

The magic number for diversification is FIVE (5) and you will learn if you are a Day Trader and follow the RULES the number FIVE (5) will present itself on several occasions.

Of all the rules you will learn in this lesson this one should be at the TOP of the list!

Most Rookie Day Traders end their new career EARLY because GREED influences their decision making process!

When Day Trading we suggest you minimize your losses and maximize your gains by NOT allowing a stock to lose more that 1/8 or 1/4 once you have purchased it and it decides to correct and go the opposite direction.

Just because we give you a suggested "Stop Loss" on certain stocks does NOT mean you have to wait for these Stop Loss Orders to kick in to exit. As a ROOKIE you MUST minimize your LOSSES by keeping them to 1/8 to 1/4 on each trade or you will be out of business in a short period of time.

Here's an example....

Using the denominator of FIVE (5)...
4 losses at .25 with 100 shares = 1.00 point or $100...
1 winner at 2 with 100 shares = 2 points or $200...
Over-all you would have more losses than gains but you will be $100 ahead...

We have determined if you follow the rule of losing no more than 1/4 point on each trade - after 5 trades - 1 of these 5 trades will show a profit to offset those 4 losses - if properly executed....

Once you have established a good winning portfolio and have a bank roll (especially with what are called RANGERS) you can then take more chances and let the stock RANGE UP and DOWN more and rely on those suggested "Stop Loss Orders" and exit points...

Holding & hoping will not work as a professional Day Trader - you will lose in the long run...

Be mentally prepared to take a loss and move on...

If you have a nice gain take it and move on!

Greed is the major down fall of a rookie and in this business a 1/2 to 1 gain on a RUN is fantastic. Those rookies who get greedy and look for more normally lose!

If you're having a bad day - over trading will not guarantee you can turn that bad day into a good day! If you are having a good day - over trading will not necessarily guarantee your continued success!

We have determined a maximum number of trades per day (on an average trading day) are ONLY 4! There is a trading window of about 1 1/2 to 2 hours a day for perfect "Set-Ups" and you can only squeeze in about 4 trades in this time frame. Any more and you will be doing what we call "Forcing A Trade"!

Forcing trades can bring down your percentage of success and exposes you to high risk...

The most risky time for Day Traders is the last 15 minutes before the close (345 pm EST). The last hour is very uncertain for the direction of stocks but the last 15 minutes is critical. If you are Day Trading, the end of the trading day is fast approaching and you still have an OPEN STOCK DO NOT HOLD THAT STOCK OVER-NIGHT!

After hours and pre-market can be very tricky so make sure you sell all open trades before close and never trade pre or after market..

Pre & After Market Trading Strategies:

Rookies should not consider trading pre or after market but why?...

Most of the easy profits are captured between 9:30 AM EST and 11:00 AM EST and from there on the odds say your risk is extremely high if you keep trading.

For a Rookie - after 11:00 AM EST should be for study and learning and NOT for trading using REAL MONEY!

As a Rookie if you experience 2 losses QUIT and wait for the next trading day!

Greed again enters into this very important rule. A Rookie has a tendency to keep CHASING a stock on a NICE run up or down once they have experienced a nice profit on the first trade. If you learn nothing else from this lesson you must learn to be satisfied with one trade on one run.

Example...

A stock is running up, you get in and make 2 to 3 points. The stock keeps running up after you sell - you are watching and can't stand to see it move up another 5 to 20 points so you get in again - NO - NO - NO! The odds are against you this stock will keep running - be happy with that nice gain and WAIT for the next SET-UP and perfect entry point as you will learn in the Charting Lessons (remember those lessons you were suppose to study the first week in #2 of this lesson) .

Sit on your hands - do not click that mouse - even though the stock may DOUBLE in front of your eyes until you understand how to read a chart!

If you are Day Trading make sure you understand how to read Level II before you enter a trade!

A truly professional Momentum Day Trader will NOT hold a stock more than 15 minutes NO MATTER WHAT!

The average is from 1 to 5 minutes. If you are trading as instructed you will catch a stock in what is called a MOMENTUM MOVE and that move should ONLY last 1 to 5 minutes. If it slows this should be a signal to SELL. Those who Hold & Hope normally lose.

As a Rookie DO NOT trade or buy Internet IPOs (Initial Public Offerings) or for that matter any new IPOs!! The most dangerous stocks day trading offers are NEW IPOs. If you want a real RUSH try trading these stocks - but be ready to take a major loss for possibly thousands of dollars.

Mentors play many roles. A Mentor, in the historical sense, is seen as someone who

...is a loyal friend, confidant and advisor
...is a teacher, guide, coach and role model
...is entrusted with the care and education of another
...has knowledge and advanced or expert status and who is attracted to and nurtures a person of talent and ability
...is willing to give away what he or she knows in a non-competitive way represents skill, knowledge, virtue and accomplishment

The most effective mentors

Welcome newcomers into the profession and take a personal interest in their career development and well-being, want to share their knowledge, materials, skill and experience with those they mentor plus offer support, challenge, patience and enthusiasm while they guide others to new levels of competence, point the way and represent tangible evidence of what one can become, expose the recipients of their mentoring to new ideas, perspectives and standards, and to the values and norms of the profession, are more expert in terms of knowledge but view themselves as equal to those they mentor

Sharing Experiences

Every mentor has a specific area of professional knowledge and skill to share. To illustrate, in the stock trading profession a part of this knowledge is referred to as "in the trenches." The stock trading mentor’s personal experiences in making and losing money is invaluable to those who have NOT experienced this as of yet. For a mentor to explain how they made or lost 5 points on a trade and how they share this experience with others on a personal one-on-one basis is better than reading about it in some manual.

Experienced Stock Trading Professionals (STP’s) develop a sense of how the market is going. They have traded "in the trenches" and know first hand what it’s like to be a successful Day Trader. As a Rookie Day Trader you can learn more from these veterans than you will ever learn from books, manuals or even this proven Rookie Day Trading System.

Day & Stock Trading is NOT always predictable and when you think you have it figured out it will turn against you. Be ready to take a loss and move on (because you WILL lose on some of these trades!). If you have used a "stop loss order" properly, as explained in the Rookie Day Trading Guide/System, you can minimize your losses and maximize your gains. Using this concept and technique you can be right or wrong 50% of the time and still make money because if you limit your losses to 1/8 - 1/4 and your gains exceed those limits a 50/50 success rate will most always put you ahead!