Praise for Trading from Your Gut

Prepare and Execute Orders
After you have set your alerts, you have a little time to relax. You
can then go through the charts to determine the exact exit stop
prices you want to use if any particular alert goes off. This deter-
mines your exact risk level, which you can use to determine your
quantity. Use whatever position-sizing methods you are comfortable
with (see the “Bibliography” if you need help determining the best
position-sizing algorithm).
Choosing the stop price is another subjective task when using
the rebound swing system. You want to set it just below the support
level. This might be a somewhat fuzzy line as prices dip through and
around previous support. Pick a line visually that you think repre-
sents the support, and then pick a price point below it. Again, do this
visually, forcing yourself to use your right brain for this task. Then
find the actual price on the side of the chart. Alternately, you can
use the highs and lows for particular days to help you determine the
exact price. Just remember that you want to pick the price level
quickly and visually first with your gut intuition, and then determine
the exact price using your analytical left brain.
If you have prepared properly, you should have all the informa-
tion at hand to enter an order with your broker when an alert goes
off. Before you enter an order, you should run one last check. Make
sure that the overall market has met your criteria for entry. Check-
ing the overall market should take less than a few seconds if you
have a 5-minute, 15-minute, or hourly chart handy. 
With the swing rebound method, you don’t want to have an order
execute if the market has not yet indicated that it is a good time to
buy or sell. If the market is close to reaching its price criterion but
C
HAPTER
7 • S
IMPLICITY AND
S
PEED
: T
RAINING TO
B
E A
M
ASTER
135
From the Library of Daniel Johnson

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ptg
has not yet met it, you can set an alert and wait until the alert for the
index triggers before you place your orders.