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Originally posted by Phoenix7
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My copy is a spiral bound, 8 1/2 by 11, 68 page, booklet, published by Superior Information Inc. Actually only 45 pages if you start at chapter 1 and read thru to the end of chapter 9. The rest is a sales pitch for his trading course and the “Members only website”
The first 5 chapters are fluff. Jacks history (rags to riches of course) and why he wrote the book. A statement showing that in 1999 he traded 25k up to 96.7k in 12 months. Didn’t mention the number or size of the trades, wins, losses or drawdown.
He mentions that one day he traded over $1 million of stock but fails to mention whether it was a winning day or not.
He shows an example of taking $1853 out of the market with a 300 share e-bay position. One trade out of, well he doesn’t ever mention how many trades.
Chapter #6 things start to get interesting. He has 8 Components of his trading system.
The first has to do with controlling your emotions. He relates a story of a guy who loses ½ a million because he followed someone else advice and goes on to reassure us that after reading the book we will have the knowledge to pick our own stocks. (With the help of his trading course and software and website of course)
The second component is the most important!!!
The second component is to trade with money you can afford to lose. According to Jack if you would be upset if you set fire to that money you shouldn’t be trading with it. If you don’t care about the money it will be easier to control emotions. In a round about way he mentions that in order to win you have to learn how to lose.
Number three is to buy stocks that are going up. TA vs FA. Don’t pay attention to FA
Fourth component: The chart set up: Bar chart with 3 moving averages (I think) he calls them trend points. A short term, intermediate and a long term tend lines that should stack in order. Add volume. Choose stocks that are making new highs, MAs are stacked in order and trading over 500k daily volume.
Fifth component basically explains the fourth component.
Component six is choose stocks that trade over $15 per share. Also look for stock where the short term trend line has acted as support. Reiterates that daily volume of 500k is important.
#7 One of his most important secrets! Use market orders to enter.
Here it gets a bit confusing as Jack likes to enter while the market is going up, jumping on a moving train so to speak. He likes to enter after a yellow bar or a blue bar but a green bar is OK but he doesn’t explain what the color coding means. (First time color coding is mentioned)
Component #7 continues on into chapter #8: “When to Sell”.
Sell when the stock gains 2, 3, 4, 5 or more dollars higher than where you bought it. That’s it. As useful as Will Rogers “Buy a stock and when it goes up sell it, if it doesn’t go up don’t buy it”.
He mentions using a short term trend line as a stop point. Here’s a quote “ If a stock hits a short term trend point and if that trend point becomes resistance, then that is where you’ll have to sell the stock and take a loss” (Someone explain that one?)
Component #8 “How to insure you make big profits”; is a list of what not to do. Here are the main points.
Don’t trade with money you can’t afford to lose.
Don’t get emotional
Don’t enter a trade without planned exits
Don’t use limit orders to enter a trade.
Don’t allow yourself to lose more than you make. (Have a positive reward/risk ratio)
Don’t turn a trade into a long term investment.
Don’t listen to wall street hype.
Added to the above is the advice to take multi point gains.
That’s it boys and girls!!
Buy stocks that are going up and sell them for multipoint gains.
In my opinion the best thing about this book is it doesn’t cost much and it doesn’t take a long time to read.
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