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To: Robert Graham who wrote (22440)	3/25/2000 10:56:00 AM
From: Chris	Respond to of 42787

Here is a trade I did in Feb on Yahoo: It's a 60 min chart: geocities.com *Couple things I look for:* 1) News to drive the stock. In this case, yahoo had 2:1 split on Feb 11. 2) Good trendline/pattern setup 3) Confirmation on Momentum indicators 4) Sector and Market Picture in check 5) Stop Loss (money management) 6) Sell criteria determined before the trade(the red trendline and blue resistance) Playing the internuts, those are the setups I look for. I spend maybe 30 mintues on the trade planning.

To: Robert Graham who wrote (22440)	3/25/2000 12:04:00 PM
From: Robert Graham	Read Replies (2) \| Respond to of 42787

I left one important item out here on my trade selection that relates to the risk to reward evaluation of the trade, that is of initial price target. So the formula for trade selection should go: determination of market (how it is trading) + selection of time frame + selection of setup (for the current market) + price action (to determine entry and initial risk) + determination of initial price target (dependant on market and nearby resistance of consequence, and used to determine risk to reward for the trade). Also keep in mind the market can change through the day in how it is trading requiring me to reevaluate my approach to the market. This of course also effects the price action I look for to initiate the trade. As a side note, one of the key areas I find very important in being able to manage the trade is understanding price action. This comes with time and depends on how the market is trading. I find each market that I find during the day for the SPOOs has a a somewhat consistent way it initiates and terminates moves. I also find the most constant of the two is its how price moves are terminated. Also all the items listed for my formula for successful day trading are all important. But some items have a larger impact on my success than others, the most important being how I manage my thinking, my frame of mind, before and during my trading. This requires me to be objective in the monitoring of myself through the day with being aware of the more subtle thoughts that I may find in the "back of my mind". For a simple example, if I am finding myself in a series of losing trades, and I find thoughts of having to make of for prior losses in my head, I may stop trading and watch the market for a period of time. Or if this thinking is evident right before the open, I may not trade for the entire day. Because this type of thinking sets me up for a series of losses. Then all I need is some attractive price action in the lower time frames to get my interest. Now watch me lose a series of trades very quickly under these circumstances trading setups or worse just the price action itself that blows apart my risk to reward criteria for trades besides being plain stupid. This overtrading can be a difficult psychologically self-destructive cycle to get out of once it begins. So sa part of a soltuion to this I am limiting myself to larger time frames for trading. This will also work out better for my multiple contract trades. This self-monitoring is proving to be the most challenging aspect to my day trading, making my understanding of how to profit in the market a very simple problem to solve in comparison. And the problems with myself I have been able to uncover in this way not only has been uncomfortably revealing at times, but also necessitated creative solutions. This aspect of trading I think is what many day traders simply do not want to deal with, for it opens a window into themselves. And when they do not deal with this aspect of trading, I see that they end up losing out with financially costly results, not considering the emotional damages that can come out of their experience. The trader's most valuable asset is their emotional well-being as it relates to trading. This must be protected. One aspect of this is to know when to quit and take time to reevaluate after a series of losses before a series of more significant losses occur. After the trader has taken on significant losses, they also can have experienced emotional damage as a result. It is repairing this emotional damage that can take the most time if it is doable at all before the trader can manage to be profitable. Bob Graham