Sammy Chua's Day Trade Your Way to Financial Freedom

Sammy Chua's DAY TRADE Your Way to FINANCIAL FREEDOM

SECOND EDITION

Day Trade Your Way to Financial Freedom, Second Edition tells you everything you need to have--and know--to launch a successful and satisfying career as a stock trader. From behind-the-scenes details on market makers and Level II trading to the stock-picking strategies and trading techniques of today's top pros, renowned trader and trainer Sammy Chua shows you how to:
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Use your Level II screen to look behind the action--and discover what the market makers are really doing
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Interpret technical indicators to identify trends and accurately forecast pending reversal points
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Stay in winning trades for the maximum possible profits, while avoiding huge losses that can cripple a trading program


New technologies and securities regulations make it the best time in history to become an independent day trader. But only you can make that first move. Let Day Trade Your Way to Financial Freedom, Second Edition give you the intelligence and confidence you need to become a successful day trader, and take control of your financial future.

Preface vii

Introduction 1

Chapter One An Overview 5

The Stock Markets

The Exchange System

NYSE Time Lines

Listed Stocks

The Specialist System

Who’s Who on the Exchange Floor

The SuperDOT System

Chapter Two The Big Board and Nasdaq 13

The Over-the-Counter Market (OTC)

NASD and Nasdaq

Nasdaq Is a Negotiated Market

Understanding Market Makers

Information Is Power

Nasdaq Service Levels I, Ii, and iii

Comparing the NYSE and Nasdaq

Electronic Communications Networks (ECNs)

Regulatory Framework

Quick Quiz

Chapter Three Brokerage Firms 25

Selecting a Brokerage

Execution Speed

Reliability

Order Routing

Price

Service

Other Online Brokerage Features

Types of Accounts

Types of Positions

Types of Trading Orders

Chapter Four Direct Access Order Entry System 39

Nasdaq Direct

SuperMontage

TotalView

ECNs

SuperDOT

Order Execution Systems Review

Chapter Five Elements of Successful Trading 47

Minimum Requirements to Begin Trading

Psychology of Trading

Risk Management

Trading Methodology

Chapter Six Trading Strategies 59

Scalping

Intraday-Trend Trading

Swing Trading

Long-Term Trading

Back Testing

Chapter Seven Technical Analysis 65

Charts

Identifying Support and Resistance

Trading Strategies

Trendlines

Gaps

Basic Chart Patterns

Volume Analysis

Chapter Eight Candlestick Charting Techniques 115

Spotting Heavy Buying and Selling Pressures

Comparing Buying and Selling Pressures

Spotting Indecision with Candlesticks

Understanding Intraperiod Activity

Candlestick Positions

Bullish Patterns

Bearish Patterns

Chapter Nine Spotting Trends 151

Technical Indicators

Key to Using Indicators

Moving Averages

Moving Average Convergence Divergence

MACD Histogram

Stochastic Oscillator

Relative Strength Index

On-Balance Volume

Accumulation/Distribution

Futures and Pivot Points

Conclusion

Chapter Ten Preparing for the Open 177

The Trading Day

Do the Research

Manage Risk

Set Alerts and Trading Screens

Intraday Trading

Market Indices

Other Market Indicators

Direction of Market Trends

Keep a Trade Journal

Conclusion 193

Index 195

SAMMY CHUA is known as the “Muhammad Ali of Day Trading,” with audited returns of 2,000 ­percent in six months. He trades daily, but also consults and trains through Sammy Chua’s Trading School, LLC. The school trains nearly 500 students via direct seminars each year and sells nearly $100,000 in home-training materials each week.

Sammy Chua used his self-taught trading skills to turn an $11,500 grubstake into a $280,000 portfolio in just six months (results independently audited and fully verified). He’d be the first one to tell you that developing those skills wasn’t easy.

But it is possible—and the Second Edition of Sammy Chua’s Day Trade Your Way to Financial Freedom shows you how to do it.

This step-by-step guidebook bypasses complicated math and formulas to focus on what really matters—the hands-on skills and knowledge you need to become a savvy, full-time trader. Straightforward language and examples of real stocks in real markets arm you with an in-depth understanding of the forces that make stock prices move up and down, along with exactly what you need to do to make consistent profits on those price moves.

Completely updated and expanded from its top-selling first edition, this no-nonsense electronic trader’s resource explains:

• How NYSE specialists and NASDAQ market makers set and manipulate prices, and how you can profit from their predictable behavioral patterns
• How to use NASDAQ Level II screens and ECNs to send your order straight to the trading floor, ­controlling your trade executions and profits
• Short-selling strategies that double your opportunities for spotting and executing an advantageous trade
• The 2% Rule, and how to use it to stop losses short while maximizing the potential profits from each trade
• Trading strategies from scalping to intraday trend trading to swing trading, and how to determine which style best fits your temperament and trading ability
• All about technical analysis, and how to use charts to find support and resistance levels that improve your ability to buy or sell at profitable turning points
• Techniques for applying Japanese candlestick charts to pinpoint unusually heavy buying and selling pressures
• Methods for using indicators and oscillators to identify the strength and direction of market trends

Through exacting research and years of experience, Sammy Chua has discovered the secrets to trading profitably in every type of market—bull, bear, or non-trending. In this Second Edition of Day Trade Your Way to Financial Freedom, Chua details those secrets as he provides you with a market-tested approach to understanding precisely why prices move, and how you can parlay those moves into a profitable trading career.