THE START-OR-STOP INDICATOR

Block Trading Inc. was a famous day-trading firm in Houston, TX in the 1990’s when day-trading was the buzzword and the burning envy of everybody who could not afford it.

Called the “bad boys of capitalism”, the firm with 24 offices and revenue of US$20M/year folded when only one out of 68 full-time day-traders at the Boston office was profitable.  In those pioneering times, amateurs in heavily computerized offices had no way of knowing about high principles such as when to trade and when not to.  They thought they have to push themselves to the limit every day, every week, every month.

Their equity kept dropping, but they kept clicking on the mouse hoping that a miracle will happen to take them out of the hole which none other than themselves dug for themselves.  Yes, miracles do happen to other day-traders as rumors from their friends circulated, but not to them.  Just like in sports: miracles indeed happen, but only to the champion and not to Tom, Dick and Harry who thought they could invite success if they put on running shoes and disguise themselves as marathoners.

Private day-traders working alone from home have few-to-zero chances to find out they are actually self-destructing because it is very hard to believe that what you love most, hurts most.

1997-2000 were the years when I was learning chart intricacies by myself like there was no tomorrow.  Yahoo, Real Networks and hundreds of other tech stocks were frequently going up US$10-$20/day making me constantly marvel at what an incredible treasure the stock markets are.  Those were the golden years of day-trading: plenty of fishing to do in deep pools of money.

How can someone pause day-trading when his colleague in the trading room just made US$5,000 before noon?  No, he can’t.  He wants to imitate.  Hotheads thought they have to day-trade nonstop and could never have imagined that in order to score they must stop for a while, nor was there any school-bell to ring in on-breaks and off-breaks for them.

If my Start-or-Stop Indicator had existed at that time, most day-traders would probably have rejected it because the general enthusiasm prevalent in rising stock markets made them think they were invincible.  Hey, when everybody thinks the same, especially about invincibility, that group is doomed to vanish like smoke in the wind.

Different from those roller coaster days, I now know that more day-traders than not will be interested to follow my charting tool.

The idea behind Start-or-Stop is not to give Buy and Sell signals like all the other Indicators and Oscillators do, but to pinpoint as accurately as possible when to day-trade and not to day-trade.  According to my knowledge, this is something inexistent in the technical analysis literature so far.

To benefit from the Start-or-Stop Indicator, feel free to day-trade like you always did and you do not even have to tell me which method you are using, but I am telling you a secret: to stay in business long-term, all you have to do is to stop or start day-trading for weeks at a time until you get new permission signals from this original charting tool.

The goal is to be active when the stock is thick with profits, and not to struggle when the stock is stingy.

The beauty of this concept is that in the same evening you get a Stop signal after you downloaded the end-of-day data, my MetaStock formula will generate Start signals in other stocks for tomorrow.  You may take them or wait until your stock triggers a Start signal.

You may keep yourself as busy as you want.

Like everybody else, day-traders take vacations or time-outs away from computer to recharge their energy.  That’s not good enough.  The correct thing to do is to let market tell you when to slow down, speed up or interrupt your activity.  It is better to follow the market’s internal rhythms than to insult the market by mistreating it like the Bank’s ATM where you deposit and withdraw cash anytime.  The big secret about stocks is for the day-trader to never defy their tall order.

The Start-or-Stop Indicator has been designed to show you when the fun in your stock(s) begins so that you too could join the party as a day-trader.  It also shows you when the fun is over and points you to new parties starting elsewhere.

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Full-time private day-trading is a wonderful gainful activity however, many more day-traders failed at it long-term than succeeded, a common, negative and debilitating pattern present in all other business models.  I wish I had accurate statistics from brokers for me to calculate the success/failure ratios and draw my own conclusions, but the brokers do not broadcast such information fearing it would spook beginners out of opening day-trading accounts …

One of the reasons most day-traders left the battlefield with the tail down is that they traded when they should not have traded.

Day-trading for the whole day is so exciting that it makes you want to do it over and over again, day after day.  Buying and selling stocks in milliseconds thousands of miles away from the Exchange is really addictive.

Professionals traded securities for the past 300+ years, yet they do not wash out of the markets as fast as day-traders do.  What evil could refuse the cash prize to private day-traders who work from home?  For many players, day-trading worked like daydreaming did.
 

Click here to take a look at FDX.
Green ribbons cover up-trends and downtrends equally, meaning that you may go long or short using your favorite Indicators with no restriction, but … you must day-trade, no doubt about it.

Red ribbons also cover up-trends and downtrends indiscriminately, but you may do just one of the following:

• Quit day-trading your stock right away until you get a new green ribbon.
• Switch to swing trading your stock.
• Find other stocks that entered a green ribbon.

I guarantee you that losses inside the red ribbons are more, bigger or both than inside the green ribbons, regardless of your strategies and the Average Profit/Average Loss ratio will be unfavorable.
Needless to say, the Start-or-Stop Indicator works with currencies, ETFs, futures, indexes and anything else for which chartable data exists.

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Knowing when to do things and when not or to do things differently, is a very powerful concept.
Imagine the hotel owner being able to open the rooms only when his hotel is fully booked and to throw everybody out when the number of tourists drops by 20%, locking the hotel temporarily until he is fully booked again.

Imagine the retailer who refuses to open his shop unless crowds of buyers with cash in hand flock to his door and who, because of some mysterious superior wisdom, can afford to keep the doors closed when not enough buyers are waiting in front of his shop.

Sadly, commerce does not work that way and businessmen remain forbidden such privileges which are reserved only for the elites controlling the supply.

These examples prove that, although detailed sales reports and accounting analyses exist for all businesses, unfortunately they cannot be used with the same efficacy as the Start-or-Stop Indicator can.  The hotel owner and his managers analyze and reanalyze occupancy rates looking at P/L statements until midnight but they also look at empty rooms most of the year.  Retailers look at sales figures until their eyes cross but they also look at items gathering dust on the shelves not selling.

And while all these professionals get used to slow days, rude customers and rising costs, they in fact are increasingly cultivating their gross inabilities, yet they advertise their desperation in month-end specials thinking they know what they are doing when, in reality, they have no choice.
At the high end, astute day-traders following the Start-or-Stop Indicator get used to steady profits, they can switch from day-trading to swing trading and back overnight, this way cultivating excellence, and they are always alert to see if something new they did not know before comes up …

And one more thing: why did day-traders who flopped before year 2000 and trashed themselves back into the struggling 9-to-5 working class not save money since then to return to the game they once thought they loved?  It is because the destiny of many people is to cheat on themselves and keep losing from cradle to grave.
What did they succeed at after they failed at day-trading?

Last but not least: if day-trading worked well for you for the past 20 years nonstop and catapulted you up to millionaire status by now, my hat off to you, but think how much better it could have worked if you had a tool like this Start-or-Stop Indicator to show you precisely when to boost up your routine and when to reduce it or to switch to swing trading.

To score repeatedly, it is not enough to be a nice guy and work hard, but also you must have the winds of the stock market at your back.
The 67 losers at Block Trading Inc. and the tens of thousands of nameless day-traders who went out of business like them giving day-trading a bad name, believed they were making money, when in fact, not only were they pissing against the wind when the wind was strong, but also they kept on venturing out to sail the high seas of the stock markets when no wind was blowing.

Feb. 2012

THIS IS A MAJOR TECHNICAL ANALYSIS BREAKTHROUGH

UNLIKE ANYTHING ELSE SO FAR

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