Long Term Secrets To Short-Term Trading

Figure 6.3 Using a better exit technique. 

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shown and exited with either a $2,500 stop in the S&P 500 or $1,500 in the Bonds or on the close the third 
day after entry. 
The entry day was not the calendar date but the trading day of the month (TDM). A month can have 22 
trading days, but because of holidays, weekends, and the like, we don't always get 22 days. Our entry rule is 
to buy or sell on the open of the TDM shown. This means you will have to count how many trading days 
have taken place so far this month to set up the trade. 
This concept, TDM, is akin to seasonal influences. Most other authors and students of market activity 
have focused on calendar days but that approach has inherent problems; if the computer spits out that the 
15th calendar day is the best for a buy, yet this year the 15th is a Saturday and the day before is a holiday, 
just when do we take action? On Wednesday, Thursday, or the following Monday? TDM eliminates this 
question, giving us focus on a specific tradable day. 
I do not trade these days as exclusively, or should I say, inclusively, as TDWs. I use TDMs as setups, 
leading indicators of when to take what type of action. I may or may not take a TDM trade, I reserve 
judgment for that specific trade when that time rolls around. I will want to see what else is going on because 
this is a thinking person's game that deals in reality, not a robotic virtual reality experience. My research 
shows that all markets have TDM setup periods where the odds of a rally or decline are definitely tipped in 
our favor. If you trade markets other than the ones discussed in this book, you should get a computer, or 
programmer, to provide you with this information on your trading vehicles. 
Indeed, there is a time to sow and a time to reap each week and each month of the year. Some times are 
better than others, but only a very inexperienced trader would blindly take such trades. My strategy is to find 
a bias such as TDW and TDM and then couple it with another bias to load or stack the deck in my favor. 
Should you and I play cards, for money, trust me to come with a marked and stacked deck, which is exactly 
how I want to trade; with as many odds in my favor as possible. If the scales are not heavily unbalanced in 
my favor, why trade? There are plenty of trades every year that are stacked deck trades, I will wait for them 
to materialize. 
Enough said. Tables 6.6 and 6.7 show the best TDMs for Bonds and the S&P 500, respectively. 
These results are actually staggering. By following some very simple rules, $211,910 of profits could 
be had from trading Bonds just 6 days a month, and $387,320 from trading the S&P a mere 7 days per 
month. The S&P results reflect no stop on entry day, but a $2,000 stop after entry day, whereas the Bonds 
used a $1,500 stop starting on entry day. 
Although you may not want to blindly follow these trade dates, we certainly want to be awake and 
aware around these pivotal trading periods because we have a definite advantage in the game-we know when 
strong rallies are most likely to take place. 

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