Profitable Day and Swing Trading E-Book

Harry Boxer

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: Wiley Trading Series
• Sprache: Englisch

Seitenzahl: 171

Veröffentlichungsjahr: 2014

Beschreibung

Harry Boxer's proven techniques for short-term traders Written in easy-to-understand language, Profitable Day andSwing Trading + Website explains the trading tactics that drawon price, volume, and pattern recognition. Highly regarded traderHarry Boxer offers the information needed to recognize chartpatterns, identify trades, and execute entries and exits that willmaximize profits and limit losses. Boxer also reveals his conceptof price-volume surges as the key to identifying the most lucrativetrades. Throughout the book, Boxer describes his routine forpreparing for each trading day, selecting stocks to monitor, andhow he keeps track of prices and executes trades. Step by step, this indispensible resource provides thestrategies for opening range gaps, the breakouts, and thetechniques that have sustained Boxer during his storied Wall Streetcareer. Most notably, he reveals how to trade rising channelsfollowing an opening gap or high-volume breakout. Boxer also showshow his strategies can be applied for both day trading and swingtrading. * Offers the winning strategies for day and swing traders * Shows how to recognize the signs and patterns that will lead tosuccessful trades * Reveals how to spot a technical price "event" on highvolume * Written by acclaimed trader Harry Boxer who has more than 45years of successful trading experience For anyone who wants to tap into acclaimed trader Harry Boxer'swinning tactics, this book has it all.

Leseprobe

PROFITABLE DAY ANDSWING TRADING

The Wiley Trading series features books by traders who have survived the market’s ever changing temperament and have prospered—some by reinventing systems, others by getting back to basics. Whether a novice trader, professional, or somewhere in-between, these books will provide the advice and strategies needed to prosper today and well into the future. For more on this series, visit our Web site at www.WileyTrading.com.

Founded in 1807, John Wiley & Sons is the oldest independent publishing company in the United States. With offices in North America, Europe, Australia, and Asia, Wiley is globally committed to developing and marketing print and electronic products and services for our customers’ professional and personal knowledge and understanding.

PROFITABLE DAY AND SWING TRADING

Using Price/Volume Surges and Pattern Recognition to Catch Big Moves in the Stock Market

Harry Boxer

Copyright © 2014 by Harry Boxer. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

Charts by Worden Brothers, Inc. have been used with permission. Copyright © 1997-2014 Worden Brothers, Inc. All rights reserved.

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Library of Congress Cataloging-in-Publication Data:

ISBN 978-1-118-71487-4 (Hardcover)ISBN 978-1-118-71473-7 (ePDF)ISBN 978-1-118-71489-8 (ePub)

This book is dedicated to my lifelong friend Gary Fishman, who passed away suddenly in April 2012. He and I learned the markets and technical analysis together from the time we were teenagers until his passing. We shared somewhat parallel investment paths writing investment columns in our respective college newspapers and then professionally in our early years of employment in Wall Street. Gary and I had planned to write this book together, and since he had just recently retired, the idea seemed to give him a spark of excitement. I count him among my best friends in life and miss him dearly.

CONTENTS

Preface

Acknowledgments

About the Author

Chapter 1: My Journey as a Trader

Chapter 2: Preparing for the Trading Session

Analyzing Patterns from Previous Trading Day

My Morning Routine

What to Look For

Chapter 3: Analyzing Early Trend Development

Developing a Disciplined, Organized, Focused Approach

Monitoring the Early Price/Volume Action Closely

Worden Brothers Volume Buzz Indicator

Creating a Focus List

Chapter 4: My Favorite Day-Trading Patterns

The Intraday Rising Parallel Channel with High Relative Volume

The Best Day-Trade Pattern

The Low-Volume “Ebb”

Chapter 5: Using Moving Averages

Moving Average Crossover Signals

Chapter 6: Drawing Trend Lines and Why They’re Critical in Analyzing the Trend

Channels and Angles

Support and Resistance Lines

Reviewing and Adjusting Lines

Chapter 7: Setting Targets and Price Objectives

Determining Exit Points

Using Fibonacci and Elliott Wave Cycle Analysis

Theory Interpretation

Series of Wave Categories

Chapter 8: What Kind of Trader Are You?

Where to Set Targets

Chapter 9: Determining and Setting Stops

Setting Stops Where Important Price Support Levels Are Violated

Setting Stops under Key Trend-Line Violations

Setting Stops Using Key Moving Average Violations

Chapter 10: Technical Divergences and Loss of Momentum

Price Trend Angle Divergences

Underlying Technicals Diverging from Price

Balance of Power

MoneyStream

On-Balance Volume and Divergences

Conclusions

Chapter 11: The Interpretation and Use of Stochastic Oscillators

Introduction

Calculation and Interpretation

Fast, Slow, or Full

Overbought/Oversold

Bullish and Bearish Divergences

Bullish and Bearish Setups

Conclusions

Chapter 12: Moving Average Convergence/Divergence

MACD Formula

Interpretation

Signal-Line Crossovers

Zero or Center-Line Crossovers

False Signals

Divergences and Loss of Momentum

Conclusions

Chapter 13: Bollinger Bands

Interpretation

Signal: W Bottoms

Signal: M Tops

Signal: Walking the Bands

Conclusions

Chapter 14: Position Sizing and Money Management

Position Sizing

The Stop-Loss as a Money Management Tool

Raising and Adjusting Stops as Price Progresses

The Trailing Stop Method

Chapter 15: Swing Trading

Chapter 16: Rules and Guidelines to Better Trading

Chapter 17: 38 Steps to Becoming a Successful Trader

About the Video

Index

PREFACE

For most of my nearly 50-year trading career I have been told or asked many times to put it all down on paper and write a book on my knowledge, trading experiences, and personal methods of technical analysis. I just wasn’t ready or motivated to do so until now. Likely, this has at least partially developed as a result of doing many online live webinars and personal training seminars for Worden Brothers, as well as speaking at many traders’ expos and money shows over the past decade or so.

I’ve also come to see and feel that I truly enjoy the teaching aspect of technical analysis. Educating traders and investors on my site, thetechtrader.com, affords me that opportunity each and every trading day. The interaction with my subscribers, positive comments, and testimonials I have received over the years have not only been appreciated but very gratifying as well. This, too, has added to my desire to get this book written.

For many years I hesitated to write this book because by nature I am not a patient person or personality type for the most part. That’s pretty typical of Sagittarians. However, I now believe that age has mellowed me enough and increased my desire to write this book as an educational tool to assist traders of all types in enhancing their knowledge base and trading skills.

I live and breathe charts and technical analysis and have read most of the generally accepted important books on the subject over the years. I can speak for hours and days on the subject and often find when my hour to speak has ended I’ve barely scratched the surface of what I wanted to cover. This book is meant to complete that presentation in more depth.

If you are a trader who hungers for more in-depth knowledge of technical analysis, especially as it relates to methods of day and swing trading, this book is for you! However, traders with longer-term horizons will also find great benefit, as the concept and rules in this book apply on all time frames.

I truly believe that no matter what level of trading experience you have, after reading this book, you’ll find you have likely enhanced your skill set and become an even more efficient and, most important, more profitable trader.

ACKNOWLEDGMENTS

I want to acknowledge several people who were largely responsible for my progress and successes over the past 50 years. First, Hank Greenstein was responsible for introducing me to charting and technical analysis. My former brother-in-law, Stephen Feldman, was an early supporter of mine and cocreated our investment club in our late teens; he greatly increased my interest in investments and technical analysis. Joel Bernstein was one of my early mentors and supporters, who encouraged me to have a career in Wall Street. Harris Shapiro, over the past 20 years or so, has greatly assisted and supported me. Harris is responsible for recommending me and introducing me to my current partner in our web site. I remain close friends with him and collaborate daily on investment ideas. I owe Harris a lot for his continual confidence in me to this day. Finally, but certainly not least, I thank my wife, Denise, and daughters, Taylor and Rylee, for putting up with my many days and hours away from them, traveling to speaking engagements and focusing daily on my chart analysis and web site.

ABOUT THE AUTHOR

Harry Boxer has more than 45 years of Wall Street investment and technical analysis experience, including 8 years on Wall Street as chief technical analyst with three brokerage firms. He won the 1995 and 1996 worldwide Internet stock-market trading contest, “The Technical Analysis Challenge,” sponsored by AmericanInvest.com. Boxer is widely syndicated and a featured guest on many financial programs and sites, including CNBC, CBSMarketWatch, Forbes.com, DecisionPoint, and many more. In addition, he conducts nationwide training seminars on his methods for Worden Brothers. He is currently cofounder and chief writer of The Technical Trader (www.thetechtrader.com), a real-time diary of his trading ideas and market analysis, and is also a technical consultant to many Wall Street hedge funds and large institutional traders.

CHAPTER 1

My Journey as a Trader

When I was in my early teens, I became intrigued by the stock market, how and why it moved, and how I could possibly analyze or gauge those movements to benefit financially. I was constantly scouring the newspapers for unusual stock movements using closing prices and wondered how could I use that information in an organized manner for profitable investing.

My big aha moment came a couple of years later when I met a cranky old stockbroker named Hank Greenstein. During the summers in the early 1960s, my parents rented a bungalow in a bungalow colony at Greenwood Lake in upstate New York (quite typical of many Jewish families during that period). Hank was a neighbor in that colony, and I had several conversations with him about the market and investing after I heard he was a stockbroker. One day after Hank and I talked for a while about investing, he said, “Young man, you are very bright and inquisitive and tuned in to the market in a way I have never seen in a young man.” He then said to me, “Come over to my place. I want to show you something related to investing I think you’ll be very interested in.” Hank proceeded to show me something he created by hand called stock charts on graphic chart paper. He literally would add a vertical line or bar to the graph each day showing the high, low, and last closing price. That was certainly a painstaking process, indeed, requiring patience for the patterns to develop over a period of time until they became useful enough to trade on. Keep in mind this was 20 years before the first IBM PC hit the market and the subsequent arrival of charting software!

To say the least, I was very excited! Had I found the “Holy Grail” for stock investing and trading?? My thoughts ran to how I could use this method for myself, and I asked Hank how I could learn more about this. He suggested I read Technical Analysis of Stock Trends by Robert Edwards and John MaGee (now widely considered the “bible” of technical analysis).

Based on the charts Hank had created by hand, he recommended three stocks to me in 1962 (shortly after the market had tanked during the Cuban Missile Crisis). Those three stocks were Chrysler (nearly bankrupt earlier), now around $4; U.S. Steel, around $18; and Sperry Rand (maker of the first large mainframe computer UNIVAC), around $13. I decided to invest my summer earnings of $3,000 (a lot at that time) in all three, and the rest is history! Sperry ran to over $40, U.S. Steel over $80, and Chrysler more than 10-fold over $40! Wow, I certainly was hooked for life!!

When I was back in New Jersey at home late that summer I acquired the book and immersed myself in it. I was fascinated and totally engaged. As a matter of fact, I then read it again. Over the years, I have read it six or seven times as a refresher—just to make sure I wasn’t getting into bad technical habits or overusing certain technical formations because I was “comfortable” with them.

After high school, I started an investment club called the “Mutual Growth Fund of New Jersey” along with my best friend at the time (Gary Fishman), my sister’s boyfriend (later husband), Steve Feldman, and his best friend, Neil Prupus, who was a finance major, both in school at Rutgers University in New Jersey. We took approximately $4,000 dollars and later added quite a few more of our friends and associates. Over the next couple of years using primarily technical analysis, we built the club’s assets to nearly $120,000 on an investment of just 30,000!

At that time I also started an investments column in my college newspaper at Fairleigh Dickinson University called “The Traders Corner.” By doing that column I was able to write down my thoughts and market ideas, which helped me hone my technical analysis and trading skills as well.

During college I often found myself at a broker’s office sitting in front of the big electronic tape that scrolled across the top of the room in front where many seasoned (and older) traders congregated. They considered me a young whippersnapper until they saw how well my ideas worked and became curious how I came up with my picks. They were amazed at my knowledge and feel for trading, as well as my fearless approach. An example was a trade I made on then market darling Syntex (the first company to develop a birth control pill). I saw it run from $190 to $250 in just a day after it had run earlier in the week from $150. I decided it was overbought and shorted it near the high and within a couple of days covered it under $200 for a quick 50-point gain!! I quickly became their friend (as you can imagine!) and became part of the trader’s gang at the office. That’s where I met Joel Bernstein, assistant manager and also a technical analysis advocate. When he saw the depth of my technical skills, he introduced me to the branch manager, Bill Somekh, who asked me if I would be interested in a career as a stockbroker after I graduated from college, which I was thrilled about. However, he wanted me to get some brokerage experience first and suggested I find a position with a smaller Nasdaq firm where I might build my book of clients and then come to work at his office, which I proceeded to do. I found a broker training position at a small firm called Carlton Cambridge in Fort Lee, New Jersey, and worked there for about two years or so before moving to Bill and Joel’s firm, Weis Voisin & Cannon.

Later on, I moved to New York City and took a position with Pressman, Frohlich & Frost to be at the heart of Wall Street. They quickly were impressed with my technical knowledge and suggested I write a weekly technical letter for the brokers at the firm called “The Traders Corner.” Sound familiar? My experience there was immense. I got to see how the “Street” works close up and interfaced with many big traders and fund managers who loved my technical skill set. It was the mid-1970s, and volume on Wall Street was still quite paltry compared to current or recent levels. As a young man with very little experience as a broker and low volume levels on Wall Street, commissions were hard to come by, and I was not being compensated for my weekly newsletter, other than a larger commission percentage take. Then came the Nixon bear market in 1974, and most brokers suffered big commission drops and loss of income. I witnessed several brokers’ career demise and departures and eventually decided to leave Wall Street a disappointed young man.

During the following 20 years I continued to trade actively and hone my technical analysis skill set while employed in the executive search business and excelled in that field as well. I continued to read every book on technical analysis I could get my hands on. I eventually decided to make the move to California and started my own executive recruiting firm (now the largest in Los Angeles). However, my love for trading and technical analysis was rekindled with the advent of personal computers and charting/trading software programs that just kept getting better and better.

In 1993 I found TC2000 or TCNET (by Worden Brothers) and have been using it ever since. I eventually began doing webinars and then training seminars for the Worden seminar training series. For me it’s clearly the best charting software on the market and continues to evolve with more and more features and programs at every new release. I highly recommend it.

■ ■ ■

In 1995, with the Internet becoming more and more popular and expanding rapidly, I found a trading contest called “The Technical Analysis Challenge” and entered it for kicks (no prizes were awarded, especially during the internet’s infancy). I astounded the founder, Neil Hughes, with a winning percentage of 135 that year, and he encouraged me to enter again in 1996, which I did and won again! That year my gains were 148 percent. Neil asked me to fly up to Seattle, where he lived, to discuss starting a technical web site, which I agreed to! We named it—what else?—The Traders Corner! We had some success with building subscribers, but during the early development of the Internet, it was very difficult to get people to pay for anything. Most curious surfers were trying to get something for free and not yet convinced the Internet was anything more than an information-for-free tool! After about 18 months, I decided the effort I was putting into it was not giving me the financial returns I wanted, so I decided to discontinue the service.

By 1999 the Internet and the stock market were becoming popular and very active places, and the development of the Internet with faster servers and the advent of computerized and online trading, I believe, was a chief reason for the boom in the markets, especially Nasdaq.