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Way of the Trade: Tactical Applications of Underground Trading Methods for Traders and Investors, + Online Video Course

Book Description

Praise for Way of the Trade + Online Video Course

"Jea Yu's Way of the Trade offers serious traders a comprehensive and compelling approach to short-term trading. Jea writes in a reader-friendly style, connecting market realities with sound trading techniques and risk management strategies. If you are dedicated to succeeding in the trading world, Way of the Trade belongs on your bookshelf."

—Toni Turner, President, TrendStar Trading Group, Inc.; author of A Beginner's Guide to Day Trading Online and Invest to Win: Earn and Keep Profits in Bull and Bear Markets with the GainsMaster Approach

"In his new book, Way of the Trade, Jea Yu does a great job explaining market truths and delivering the tools helpful for profitable trading. There is so much valuable information in this book, but the section on 'The 5 Laws of the Marketplace' alone is worth the price of this book. A must-read for the serious trader!"

—Bennett A. McDowell, President, TradersCoach.com, and author of The ART® of Trading, A Trader's Money Management System, and Survival Guide for Traders

"Jea Yu's powerful new book offers a wide range of tools, strategies, and insights to help traders at all experience levels. Combining his unique market methodology with high-powered tape reading techniques, Yu's well-written narrative presents serious-minded readers with a detailed road map to short-term profits."

—Alan Farley, Editor/Publisher, Hard Right Edge "Jea is like the Kevin Smith of trading. His knowledge and historical perspective are rivaled only by his passion for the business. From X-Men comics to Bloomberg stock pickers, Jea takes you on a journey through the culture and mind of a Wall Street trader."

—Jeremy Frommer, CEO, Jerrick Ventures; former CEO of Carlin Financial Group; former Head of Global Prime Services, Royal Bank of Canada

"Jea Yu's latest masterpiece, Way of the Trade, illuminates a path of trading success appropriate for new hopeful traders and veterans alike. Way of the Trade encapsulates the strategic wisdom of Sun Tzu with the modern street smarts of a market master. Skillful use of trading examples, along with lessons of individuals who beat seemingly impregnable odds, make Way of the Trade incredibly difficult to put down and impossible not to learn from."

—Robert Weinstein, TheStreet.com contributor, founder of Paid2Trade.com, and full-time trader

Table of Contents

  1. Cover Page
  2. Title Page
  3. Copyright
  4. Dedication
  5. Contents
  6. Preface
    1. This Is the Way of the Trade
  7. Acknowledgments
  8. Chapter 1: The Mutation
    1. The Phantom Menace
    2. Typical HFT Sheep Skinning Cycle in 2009 to 2012
    3. Enter the Thunder and Tumbleweeds Market Trading Landscape
    4. Defining Market Landscapes, Climates, and Terrains
    5. The Five Laws of the Marketplace
    6. The Profit By-Product
    7. The Model of Excellence: Shokunin
    8. The Excellent State of Excellence
    9. Earnings Seasons: The Super Bowl of Momentum
    10. Global Influences: Europe, China, and the World
  9. Chapter 2: The Hybrid Market Predator
    1. The Hybrid Market Predator
    2. Relevant Traits of the Three Skillsets
    3. Kurt Warner: Adversity Conditioning Model
    4. Pockets, Pockets, Pockets
    5. Properly Aligning Your Personal Perspective
    6. Manifesting By-Product into a Product
    7. The Eight-Step Process to Turn Idea into Profit
  10. Chapter 3: The Morning Ritual
    1. Hunting for Prey: Headliners and Corganic
    2. The Gapper/Dumper Three-Reaction Sequence
    3. Ritual Religion
    4. Wasted Effort
    5. The Real Work, Don't Skimp!
    6. Law of Reciprocity Revisited
    7. Fast and Simply Thorough (FAST) Chart Analysis
    8. Step-by-Step Ritual Routine by Time
    9. Evaluate the Climate
  11. Chapter 4: The UndergroundTrader Trading System: The Katana
    1. Recommended Online Direct Access Broker: Cobratrading.com
    2. Configuring the Rifle Charts
    3. The Role of the Bumpers: Moving Average Breakouts, Breakdowns, and Trends
    4. The Four Parts of Trends: Consolidation → Break → Peak → Exhaustion
    5. The Role of the Bumpers: Bollinger Bands
    6. The Slope Effect
    7. The Weekly and Monthly Moving Averages and Bollinger Bands
    8. The Role of the Stochastics
    9. Spotting and Trading Fades
    10. The Two Most Important Price Patterns: Pups and Mini Pups
    11. Stinky 2.50 and Five-Level de Facto Price Bumpers
    12. The (Only) Three Candlesticks I Use
    13. Massive Volume Spikes
    14. Mischievous Mistick Manipulation
    15. The Essence of Stops
    16. Less Is More Applies More Than Ever
    17. Early and Mid-Stage Perfect Storms
    18. Three Levels of Stop Mindset
    19. What to Do after a Disaster
    20. The Three Steps for Proper Re-Setting
    21. Purposely Add More Stocks to Watch List and Minders
    22. Step-by-Step Healing and Recovery
    23. The Unconditional Three STOP Rule
    24. DSS: Defensive Sprawl Scaling
  12. Chapter 5: The Perfect Storm Pattern Trade
    1. What Is a Perfect Storm?
    2. Perfect Storm Profile
    3. Spotting Perfect Storm Opportunities with the Anchor Time Frame
    4. How to Trade the Three Types of Perfect Storms
    5. How to Play Trending Perfect Storms
    6. Trading the Sympathy/Laggard Perfect Storm
    7. The Tightening
    8. Tightening Reversals
    9. How to Play Tightening Perfect Storms
    10. The Consolidation Break
    11. How to Play Consolidation Break Perfect Storms
    12. Repeating Nature of Perfect Storms
    13. Double-Hedged Sword Sequence Trade
    14. How to Execute DHSS Trades
  13. Chapter 6: Optimized Four-Level Research Process
    1. Level 1 Research Process: Spot Technical Analysis and Headline Search
    2. Level 2 Research Process: Digging Deeper into Fundamentals
    3. Level 3 Research Process: Mining Perspectives
    4. Level 4 Research Process: The Juicer, Full Immersion
    5. The Afterglow Effect
  14. Chapter 7: How to Prey for Playable Stocks to Trade
    1. Stocks Are Battlegrounds and Participants Prey
    2. Playability: Internal and External Factors
    3. The Two Types of Playable Stocks: Headliners and Corganic
    4. Where to Find Playable Stocks: Sources for Ideas
  15. Chapter 8: Stalking Prey
    1. Aging: Waiting for the Pattern to Form
    2. Stalking: Setting an Alerts Minder on Your Trading Platform
  16. Chapter 9: The Encounter from Start to Finish
    1. Anxiety: Bad versus Good
    2. React, Don't Panic
    3. Distinguishing Trade Entry Stages: Early, Impact, Late
    4. The Complete Trade Sequence
    5. Pretrade Process: Information Gathering and Analysis
    6. Trade Execution Process: Entering the Position
    7. Trade Management Process: Monitoring and Exiting the Position
    8. Identifying Maladies in Your Trading
    9. Post-Trade Sequence Analysis
    10. Reconstruct the Trade and Conditions Accurately
    11. Summary
  17. Chapter 10: Portfolio Trading: The Skillset of the Evolved Hybrid Market Predator
    1. Market-Calibrated Portfolio Creation and Management
    2. General Capital Allocation
    3. Activity Allocation = General Capital Allocation
    4. Risk Averse Nature of Intraday Trading
    5. Her Majesty, Queen Leverage
    6. Application of Well-Managed Allocation Management
    7. truTV: “Not Reality. Actuality”
    8. Constructing the Portfolio
    9. General Macro Market Analysis and Allocation Assessment
    10. Qualifying the Three Types of Trade Considerations
    11. Intraday Trade Profiles
    12. Position Trade Profiles
    13. Active Portfolio Management
    14. Options Strategies
    15. Delta Neutral Hedging
    16. Covered Calls: Creating Your Own Dividend
    17. Bullish Call Debit Spreads
    18. Bearish Call Debit Spreads
    19. Portfolio Trading Schedule of Activity
    20. Harnessing Your Hybrid Evolution
  18. Chapter 11: Conclusion: Cultivating Your Personal Evolution
    1. Acknowledging the Spirit
    2. Elements That Affect One's Spirit
    3. Broken Spirits' Blowout
    4. Nourish Your Spirit
    5. Continuing Your Progress
  19. Appendix A: My Trading Tools and Anatomy of Pattern Trades
    1. Why Pattern Trading?
    2. Intraday Futures Trading Plan
    3. Trade 1: November 20, 2012
  20. About the Video
  21. About the Author
  22. Index