Long Term Secrets To Short-Term Trading

1. We only make money on large-range days. 
2. Large-range days usually close at or near the high, if an up day, the low if a down day. 
I am willing to let the fancy dancing day traders figure out the machinations of interday swings. I 
doubt they can do it, but even if they can, it is very hard, frustrating, and demanding work. Despite the two 
old codgers' knowledge of tape reading and years of market wisdom, they had no more ability to correctly 
call market moves from tape watching than any of the rest of us. We have gone from tape reading to quote 
machines, but the game, or myth is the same, and so is the degree of difficulty. It is pressure city to sit in 
front of a quote machine for 7 hours a day battling, guessing, and being proven wrong more often than not. 
About twice 1 year, I get talked into bankrolling some hotshot trader who thinks he or she can profit 
from these short-term swings. Let's see, two traders a year for 35 years, that's 70 times I should have 
learned the lesson I am teaching right here, right now. I just don't think it can be done. The only caveat I 
would put here is that it cannot be done with a system or mechanical approach. I have seen traders with a 
"feel" succeed at this, but that feel often deserts them and is something they cannot pass on to another 
person. Therein my work is different: you or anyone can repeat what I do. 
I place my trade knowing only one of three types of days will develop: a small-range day that will 
produce a small loss or gain; a day that reverses against my position; or a large-range day that, if I am on 
the correct side, means I will finish the day very near the high of an up day or the low of a down day. 
Although no one can predict what will be the high or low of a large-range day, I can predict that such days

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will most often close at their extreme-thus there is no need to try to play any silly technical games of 
wiggling and waggling buying and selling during the day. 
I can prove my point about large-range days with the following charts. Figures 3.1 through 3.6 show 
different time periods of Copper, Cotton, Soybeans, Pork Bellies, Gold, and T-Bonds, a pretty wide diversity 
of markets. Carefully go through each chart, note the large-range days, and then notice where they opened 
and closed. 
In the vast majority of the large-range, up close days you should have noted that price opened near the 
low of the day and closed near the high. The down close, large-range days reveal just the opposite trading 
pattern; openings near the highs and closes near the low of the day. 
What this all means to short-term traders is that, to catch a winning 
trade, the most profitable strategy is to hold to the close. 
I cannot emphasize this enough. The most profitable short-term trading strategy I know and use is to 
enter the trade, place my protective stop, then shut my eyes, hold my breath, quit looking at the market, and 
wait to get out on the close. Or later! If I am lucky enough to get a large-range day I will