Long Term Secrets To Short-Term Trading

"OK," I said, "what's the last price?" and was told it was trading at 77.00 down from 77.90, this told 
me price had already gone above my stop so I thought I'd wait for a pullback. 
I called back later, price was at 77.30. Again, I did nothing. Why you ask? I really don't know, except I 
thought I'd "watch the market" to see what 1 should do. The funny thing is I now know if it went higher I 
would have waited for a pullback, if it went lower I would have been afraid to buy. Up or down would scare 
me out, and that's just what happened! What would I have "seen" anyway, handwriting from God? 
Later in the day I called back, now Copper was at 80.30. "Damn ... OK, buy one at the market." Now I 
knew Copper was really hot, and buying it violated everything you had taught us that weekend. But 
something, almost a mysterious force, "pushed" me into the trade. I bought pretty much at the high of the 
day, because I was upset I bad not gotten in earlier. 
The very next day Copper began a pullback, fortunately it eventually went higher, but it cost me $500. 
Dumb, dumb, dumb. Haven't I learned anything yet? Yeah, I have, it's simply this, Plan your trades and don't 
deviate, don't let emotions push your over the cliff at just the wrong time. 
Rick's comments kind of reminded me of fishing, how I'll toss a worm in and wiggle it just a little, no 
bite, then a little more, still no bites, then just a little twitch and ... Blam! I've hooked a nice fish. The market 
seems to hook us just like a fish with those little wiggles until we just can't resist and fall for it; hook, line, 
and sinker. The problem is that this is not catch and release, it is bite and lose, no more "forced feeding 
frenzies" for me! The next time old man greed taps you on the shoulder or your hear an emotional call luring 
you to the bait ... don't bite! 

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101 
My Smash Day Patterns 
The siren song of greed is what keeps the public on the losing side of the ledger in this business. That 
is bad for them but good for us if we can figure out what it is that gets them to bite, what sucks them into 
wrong decisions. One such "event" is what I have labeled smash day reversals. These are days where the 
market has a major break, up or down, this violent action pulls the public in to the foray. 
There are two types of smash days. The first is pretty obvious. A "smash day buy setup" consists of a 
day that closes lower than the previous day's low, a "naked close" is what Joe Stowell, who's got a great 
eye for charts, calls these. Such days may take out the previous 3 to 8 days' lows as well. To the chartist, 
the public, or professional technical analyst, this looks like a breakout to the downside, thus the extreme 
selling brings them to the table. 
Sometimes they are right, but usually dead wrong if the market immediately reverses itself. 
A smash day sell setup is just the opposite (see Figure 7.7). Here what you will be looking for is a day 
that closes above the prior day's high and most likely "breaks" out to the upside to close above a trading 
range. This is the twitching worm that causes the public to leap before they look. The illustration shows 
how this usually looks. What you have here are the buy and sell setups.