Michel SEMERTZIDIS, Ph.d.,    Financial Web Site

Ideas
 

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Gérard BLONDIN, 10 Proverbes boursières pour vous enrichir, Ed. Peyratet Courtens

1/ Il faut acheter au son du canon et vendre au son du violon (vendre six mois plus tard, la bourse brûle ce qu'elle à aimé. Ingenico 1989:1400 frs, 1990:60 frs)

2/ Les arbres ne montent pas jusqu'au ciel

3/ Quand Wall Street s'éternue, Paris s'enrhume

Hausse de l'indice de prix à la consommation ou hausse du déficit USA -> hausse de taux d'intérêt -> baisse Wall Street

4/ Il vaut mieux un cheque dans la poche qu'une cote sous les yeux.

Vendre pour se débarrasser d'une entreprise qui était jugé opeable mais ne l'est plus.

5/ On achète la rumeur et on vend la nouvelle.

6/ La bourse aime le blanc et le noir mais elle n'aime pas le gris.

7/ Il ne faut pas mettre tous ses oeufs dans le même panier.

8/ Préférez les filles aux mères. (En périodes euphoriques les cours de holdings montent plus vite mais en périodes de baisse baissent aussi plus vite que les filiales).

9/ Quand les pétroliers montent, la baisse est proche (A part les action pétrole).

10/ Sell in May and go away, and buy back on the derby day (mi Juin).

Qui n'encaisse pas en Mai est plumé avant l'été. (Mai. Fêtes nationales. Appels au marché, augmentations de capital, émissions d'obligations -Les résultats d'année précédente sont connus dès le moi de Mars- ).

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Dominique CATTEAUX, La (fausse) saisonalité de la bourse, (La Vie Française)

Décembre -> hausse (et le premier trimestre suivant)

Octobre ou Novembre (trou d'air, ou petit krach)

Janvier (pas mauvais)

Février et Mars (Excellents)

Avril - Mai (Baisse habituelle)

Juillet -Août (hausse)

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Jacques HAMON et Bertrand Jacquillat, Le marché français des actions. Etudes empiriques, Editions PUF

Automne -> baisse

Hiver -> hausse (argent de fin d'année)

Printemps -> baisse (impôts)

Eté -> hausse (dividendes)

° Achetez Lundi ou au besoin Vendredi. Vendre Mardi, Mercredi, Jeudi

° Liquidation des opérations à terme a lieu lors de la sixième séance de bourse avant la fin du moi. (Journée médiocre: spéculateurs qui jouent à terme n'intervient pas ce jour la). Séance suivante -> hausse.

Acheter des options d'achat CAC40 le jour de la liquidation et les vendre le lendemain. Il y a souvent un écart appréciable.

° L'ultime journée du mois -> dénouement des contrats et des options CAC40 -> mouvements imprévisibles.

° Le jour même du détachement du coupon les actions ont tendance à rattraper une partie du montant détaché.

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STANDARD FORMAT FOR THE BUSINESS MEMO

1/ Always start by saying that you have received something and are enclosing something.

2/ State that something has been brought to your attention.

3/ State that something is your understanding.

4/ End with a strong closing line. For example: "Unless we receive a specific and detailed proposal from you by the 14th, we intend to go ahead and implant the device in Meredith.

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Stephen COVEY, Seven Habits of Highly Effective People, Ed. Fireside Books, $12

SELF-HELP CRIB SHEET

1/ BE PROACTIVE We are responsible for our own lives

2/ BEGIN WITH THE END IN MIND Know where you're going to understand where you are now

3/ FIRST THINGS FIRST Organize and act around priorities

4/ THINK "WIN/WIN" Look for mutually beneficial solutions

5/ UNDERSTAND-THEN BE UNDERSTOOD Listen to see how the others see things

6/ SYNERGIZE Make a whole grater than the sum of its parts

7/ SHARPEN THE SAW Take a break to renew your resources

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Daniel JOUVE: Communication

0/ Si vous êtes connu, on pense à vous.

Syndic.

1/ Cibler vos efforts.

2/ Message simple sincère et original.

3/ Intéresser (votre travail - lui).

4/ Instrument (Rotary, Lions, Jeune chambre économique, apparaître comme enseignant, auteur des livres-articles).

° Articles: J'ai pensé que ceci vous intéresserait.

° 2 personnes qui devraient se connaître.

5/ Elève de ..., avocat de ..., l'homme à idées de ...

Avant de faire la publicité, dites le aux proches. Ils se valorisent recevant la pub ou l'info avant la presse.

7/ Keep the hot water running (changement d'adresse, envoyer des lettres).

9/ Ne vous battez pas contre les mauvaises nouvelles. Parlez plus tard pour dire de choses positives. Au moins si c'est pas vrai, vous faites un communiqué de presse.

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Keneth BLANCHARD, Spencer JOHNSON, LE MANAGER MINUTE, Les éditions d'organisation

Très bref résumé du "plan de jeu" du manager minute

Comment offrir aux autres et à vous-même, en cadeau, la possibilité d'obtenir de meilleurs résultats en moins de temps.

FIXEZ DES OBJECTIFS; FÉLICITEZ ET RÉPRIMANDEZ LES COMPORTEMENTS; ENCOURAGEZ LES GENS; DITES LA VÉRITÉ; RIEZ, TRAVAILLEZ, APPRÉCIEZ LA VIE, et encouragez vos collaborateurs à faire de même.

COMMENCEZ PAR OBJECTIFS MINUTE (sur une feuille, lisible en 1 min)

Passez à

FÉLICITATIONSS MINUTE

° complimentez le comportement (sincèrement)

° faites-le rapidement

° soyez précis

° dites à la personne ce qu'elle a bien fait

° et ce que vous en pensez

° encouragez la personne (sincèrement)

° serrez-lui la main, et

CONTINUER A RÉUSSIR, fixer des nouveaux objectifs

Revenez une fois aux objectifs, puis passez aux RÉPRIMANDES MINUTE

° réprimandez le comportement (sincèrement)

° faites le rapidement

° soyez précis

° dites à la personne ce qu'elle a mal fait

° et ce que vous en pensez

° encouragez la personne (sincèrement)

° serrez-lui la main, et

REVENEZ AU POINT DE DÉPART, examiner, préciser et s'entendre sur les objectifs

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Robert FISHER, William URY, Comment réussir une négociation, Ed. Seuil

1/ Pas négocier sur de positions.

2/ Traiter séparément les questions de personnes et le diffèrent.

3/ Se concentrer sur les intérêts en jeu et non sur les positions.

4/ Imaginer des solutions pour un bénéfice mutuel.

5/ Exiger l'utilisation de critères objectifs.

6/ L'autre partie plus puissante: MESORE (Meilleur solution de Rechange).

La partie adverse refuse de jouer le jeu : jiu-jitsu.

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Bernard MISSENA, La négociation, Les éditions d'organisation.

PLAN DE TRAVAIL

Vendeurs au porte-à-porte. Produits identiques, entraînant à peu près toujours les mêmes réactions d'une cible, elle même banalisé.

Schéma A.I.D.A.

Attention: Il faut d'abord se faire écouter, lire.

Intérêt: Immédiatement après, l'intérêt doit être suscité.

Désir: Cet intérêt se transforme vite en désir d'acheter, d'agir.

Action: Il faut enfin faire basculer vers l'action: acquiescement, accord, achat.

On n'agit pas de la même façon sur: l'acheteur, le directeur, l'ingénieur de fabrication.

Toute négociation est ici "une grande première" est on part toujours un peu à l'aventure.

Connaître: Reconnaître le terrain. Quel est le problème? Qui décide quoi? Quelles sont les idées, les réticences?

Convaincre: On argumente alors en connaissance de cause. Un argument qui ne convient pas est un contre argument.

Conclure: Dernier travail, faire basculer du côté du oui... sinon les affaires traînent lamentablement.

Le secret les plus important de la négociation est de découvrir ce que désire exactement l'interlocuteur et de montrer ensuite qu'on le lui apporte.

NE PAS INTERROMPRE

La discussion (Mais non! Pas du tout! Pas d'accord!) est doublement stérile.

° Elle rend odieux.

° Elle ne fait que confirmer l'adversaire dans l'opinion contre laquelle on lutte.

Donc reconnaître et rendre hommage au bien fondé de l'objection: on a toujours un peu raison. Ce peut être:

° historiquement: Ce que vous dites est vrai, jusqu'à ce que...

° géographiquement: C'est vrai dans tel ou tel cas...

Mais:

° Cela désamorce l'agressivité naturelle (on ne s'empoigne pas avec quelqu'un qui refuse la discussion)

° Cela crée une attitude compréhensive, donc participative

° OUI ET NON

° Pas d'excuses internes

° Laisser exposer jusqu'au bout

° Noter: elle sera ramenée aux faits exacts et à sa juste valeur

° Ne pas minimiser

LA RÉDACTION DU MESSAGE

° Essayer d'avoir l'air d'une vraie lettre

° Suivre le schéma A.I.D.A.

Attention: Commencer par vous

Intérêt: Souvent suscité par la simple mise en scène du destinataire.

Désir: Faire miroiter les avantages de la solution proposée

Action: Action facile

° Attention au post-scriptum. Il est toujours lu. Lui réserver un argument choc.

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Burton G. MALKIEL, 1973-1990, A Random Walk Down Wall Street, Ed. W.W. Norton & Company.

Chartists believe that another reason their techniques have validity is that people have a nasty habit of remembering what they paid for a stock, or the price they wish they had paid. For example, suppose a stock sold for about $50 a share for a long period of time, during which a number of investors bought in. Suppose then that the price drops to $40.

The chartists claim that the public will be anxious to sell out the shares when they rise back to the price at which they were bought, and thus break even on the trade. Consequently, the price of $50 at which the stock sold initially becomes a resistance area. " Each time the resistance area is reached and the stock turns down again, the theory holds that the resistance level becomes even harder to cross, because more and more investors get the idea that the market or the individual stock in question cannot go any higher.

A similar argument lies behind the notion of " support level ". Chartists say that many investors who failed to buy when the market fluctuated around a relatively low price level will feel they have missed the boat when prices rise. Presumably such investors will jump at the chance to buy when prices drop back to the original low level.

Chartists also believe that investors who sold shares when the market was low and then saw prices rise will be anxious to buy those shares back if they can get them again the price for which they sold. The argument then is that the original low price level becomes a " support area " since investors will believe that prices will again rise above that level. In chart theory, a " support area " that holds on successive declines becomes stronger and stronger. So if a stock declines to a support area and then begin to rise, the traders will jump in believing the stock is just " coming off the pad ". Another bullish signal is flashed when a stock finally breaks through a resistance area. In the lexicon of the chartists, the former resistance area becomes a support area, and the stock should have no trouble gaining further ground.

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David L. BROWN & Kassandra Bentley, 1995, Cyber-Investing, Ed. John Willey & Sons, Inc.

Insider buying (the higher the better)

One month change in earning estimates (the higher the better)

Stock Price (eliminate stocks below $5 and above $100)

P/E ratio (list only)

Debt-to-equity ratio

5-year earnings growth rate

5-years cash flow growth rate

One-month change in projected EPS growth rate.

P/E ratio

Relative P/E ratio

Company growth ratio

Insider trading

No of analysts following the company

Price rank

EPS rank

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John TRAIN, 1994, The Craft of Investing, HarperBusiness

- The periodic " Roundtables " of top investment professionals published in Barron’s are of the utmost value. Some of the participants spend weeks preparing these sessions, marshaling their ideas and brushing up on the facts.

- The " rule of 72 " tells you how fast money doubles at compound interest. It’s the interest rate divided into 72. So at 12 percent, for instance, your $100,000 becomes $200,000 in six years. The rule also works in reverse. Money loses half its real value in the number of years that the inflation rate goes into 72. Thus, in a time of 6 percent inflation, the half-life of money is twelve years.

- Technical Analysis. By the time you have adjusted to a system, you can count on the rules changing.

- A simple indicator of popular sentiment is whether closed-end funds are selling at a premium or a discount. When they are at a steep discount, it is likely that the whole market is on the cheap side and may buy due for a rise. But if they are at a premium, watch out.

- Own your own home. First, our tax system encourages it. Here’s why: Suppose that instead of buying, you put the price of your house into securities, and use the income to pay rent. You’ll have to pay tax on the income stream (and indeed the landlord will be paying tax on the rent you pay him). So owning the house you live in is a highly tax-efficient transaction. Also, mortgage interest is generally tax-deductible. So, not only are you building an essential asset, you’re getting a tax break in the process. And there’s an even more important reason: inflation and indeed hyperinflation, plus very high tax brackets, come along from time to time. So you can find yourself unable to pay the rent on your home, after tax. Thus, a key rule of financing your retirement, after starting the savings habit early, is owning the place where you live.

- When to buy " Hard " Assets: Here, then, is a diagram of the indicated strategies for various conditions:

Boom Art, real estate, and other " hard " assets Stocks

Recession Short-term debt; gold Long-term bonds

- Test for Bargain Issues:

1. Buy a stock for no more than two-thirds of its net quick assets, giving no value to the plant or goodwill.

2. Buy when a stock’s " earning yield " (the reciprocal of the price-earnings ration) is twice the AAA bond yield, or when its dividend value is two-thirds of the AAA bond yield -in both cases on condition that the company owes less than it’s worth.

3. Buy stock in a company with enough in assets so that a bank would lend it an amount equal to its stock market capitalization. (This used to be a somewhat exotic test, but then became crazily overworked during the leveraged buyout vogue.)

When should you sell? Graham’s answer was, when a stock becomes 50 percent overvalued on the basis of the rules used for buying it, either because its earnings have fallen or because its price has risen.

- Bear Baiting: The safe time to invest is when there’s " blood in the streets ", as the adage goes, and the dangerous one is when everything looks wonderful. That has to be so in a market situation. If all the children sit on the south end of the seesaw because that’s the end that’s going up, it can’t go up. If the outlook is so bright that " everybody " is fully invested, where will the new buying come from to put the market higher? Quite the contrary: The market will probably decline, even if the good news is true.

The principle of contrarianism applies not only to the market as a whole but to major sectors, such as the growth stocks. It is best to buy growth stocks when the market is skeptical of them, and doesn’t give them as high a price-earnings premium over the Dow as they deserve.

- Train’s Laws

1. Price controls increase prices: It’s more production that brings prices down. Price controls, by reducing profitability, inhibit production. Then the official supply dries up and a black market arises, in which more and more of the transactions take place. Thus, the black-market price, which is of course higher than the official one, becomes the real price. To maintain supply, the black market is increasingly tolerated.

2. Government costs twice as much and takes twice as long as the private sector to do any given thing: There are two main reasons for all this: First, the bureaucrat isn’t spending his own money; indeed, if he hires more people he gets promoted. Second, the government has flawed motives: Politics comes ahead of efficiency. The investment conclusion from this is that direct or disguised socialization kills investment opportunity.

3. Nothing exceeds like success: A really good idea that becomes a big success will attract first two competitors, then four, then eight, then sixteen, then thirty-two, then sixty-four. This is why closed-en funds always go to a discount: If you have a good idea for a fund -biochemistry, let us say- so many will be formed that sooner or later the supply will exceed the demand. So, while the first few funds may sell at a premium over the net asset value, later in the process almost all will sell at discounts.

4. Most things don’t work: It is usually accepted in the venture-capital business that about one plausible idea in a hundred pays off really well.

- The Shortest Possible Course on Reading a Financial Statement

A company’s financial statement comes in four parts: the balance sheet, the income statement, the cash flow statement, and the statement of shareholder’s equity.

The balance sheet, is in essence a financial snapshot of the company at one moment in time, the end of its fiscal year. It is generally brought up to date each quarter thereafter.

The income or profit-and-loss statement shows how the business did during the period: that is, sales minus costs.

The cash flow statement shows where cash came from and what it was used for. The amounts don’t quite match those on the income statement, which includes, for example, purchases or sales on credit, where cash has not yet changed hands.

The statement of shareholders’ equity tells how much the company’s book value rose or fell during the period, whether because it made or lost money or took in new capital by selling stock. If the company made money, this statement will show how much of the profit was put back into the business and how much was paid out to shareholders.

A company’s financial statement usually includes an auditor’s opinion. A " qualified " opinion often indicates trouble.

The balance sheet is called that because it is set up to balance, like an equation: There’s an implied = sign between the two parts. On the left (or " asset ") side you show all the assets in the company at that moment -what it owns- and on the right (or " liability ") side you show the company’s debt -what it owes- plus the money that has been put up by the owners and kept in the business: the " shareholders’ equity. " If you think about it, the money you have invested in a house -your equity- plus the mortgage -a debt- perforce corresponds to the physical structure -the asset-.

Here is an example: Suppose the shareholders of a company put up $1 million, which goes to buy $1 million worth of gold. A simplified balance sheet would look like this:

Gold: $1,000,000 Shareholders’ Equity: $1,000,000

Suppose that we now borrow $1 million from the bank and buy an additional million dollars’ worth of gold. Our simplified balance sheet would then look like this:

Gold: $2,000,000 Bank debt: $1,000,000

Shareholders’ Equity: $1,000,000

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$2,000,000 $2,000,000

In other words, the two sides of the equation still balance.

Good. Now suppose that during our first year of business the price of gold doubles, and we happily sell half our hoard for the original cost of the entire amount. Our simplified income statement now looks like this:

Revenues: $2,000,000

Less: Cost of goods sold: $1,000,000

_________

Profit before tax: $1,000,000

Less: Provision for taxes: 250,000

_________

Net income: $ 750,000

_________

_________

We can use this $750,000 of free cash to pay down the bank loan, pay ourselves a dividend, build up our shareholders’ equity, or buy back our own stock.

Cash: $1,000,000 Bank debt: $1,000,000

Gold (at cost) $1,000,000 Shareholders’ Equity:

Common Stock $1,000,000

Retained Earnings $750,000

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$2,000,000 $2,000,000

" Retained earnings " on the balance sheet is where you put money the company has earned and put back into the business, not paid out in dividends.

An interesting question arises when we add to our inventory at various prices. For instance, suppose that in our gold trading activities we bought at different prices and sold at different prices. The two major systems of showing these transactions are called " First In-First Out ", or FIFO, and " Last In-First Out ", or LIFO. When the costs of raw material are rising, FIFO makes the profits look higher, since sales are taken against the earlier, low-cost, purchases. LIFO makes the profit look lower.

Footnotes to the financial statements may include information that does not show up in any numerical tables, such as pending litigation, company restructuring or prospective mergers. So always read the footnotes.

Perhaps the biggest difference between the way a businessperson and a non businessperson examine financial statements is that if you have actually been in business you tend to look at the net cash and equivalents, and at the cash flow section of the report. If a business is doing well, cash will be building up and can be put to work in useful ways: paying off debt, adding to plant, buying back the company’s own shares in the market. If things are going badly, the company will be short of cash, bank and other debt will be rising, and management will be run ragged coping with creditors instead of improving its products. (A hot growth company may also want cash because it has so many opportunities, but that’s a more agreeable problem.)

After you have worked with financial statements for a while you get in the habit of calculating the return on equity, how fast the inventory turns over, the operating profit margin, and a hundred other things.

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Meetings

Having served on various committees, I have drawn up a list of rules:

Never arrive on time; this stamps you as a beginner.

Don’t say anything until the meeting is half over; this stamps you as being wise.

Be as vague as possible; this avoids irritating the others.

When in doubt, suggest that a subcommittee be appointed.

Be the first to move for adjournment: this will make you popular, it’s what everyone is waiting for.

Prendre ses profits.

1 pb de taux swap FRF équivaut à 350-400 FRF et donc à 7-8 centièmes du Notionnel (7.437 via MNA Commodity FRSK C)

La VAR pour 6 contrats NNN pour 1 jour et 1% est 23 000 FRF

Stratégie suivie: Suivre le trend du moyen terme, en coupant presque tous les jours pour prendre de profit, et en laissant la pose ouverte pour 1-2 jours en cas de perte, pour ne pas la matérialiser. Avec un stop de 20 cts suivi.

MARKET WIZARDS:

Go with the trend.

Undertrade: take 1_2% risks and not 5-10%.

The principal characteristic of a bear market is very sharp down movements followed by quick retracements.

If you become unsure about a position just get out.

Hold on to your winners and cut your losers.

At a minimum, it is important not to have a short position with a loss on Friday if the market closes at high, or a long position if it closes at a low.

When you have a destabilizing loss, get out, go home, take a nap, do something, but put a little time between that and your next decision.

When things aren't going right, don't push, don't press. You have to minimize your losses and try to preserve capital for those few instances when you can make a lot in a very short period of time.

You should expect the unexpected in this business; expect the extreme. Don't think in term of boundaries that limit what the market might do.

Don't ever average losers. Decrease your trading volume when you are trading poorly; increase your volume when you are trading well. Never trade in situations where you don't have control (in front of key reports).

Don't be a hero. Don't have an ego. Always question yourself and your ability. Don't ever feel that you are very good. The second you do, you are dead.

Don't focus on making money; focus on protecting what you have.

If I were buying, my point would be above the market. I try to identify a point at which I expect the market momentum to be strong in the direction of the trade, so as to reduce my probable risk. I Don't try to pick a bottom or top.

I don't usually take on a big enough position to do any lasting damage to my portfolio.

Cutting losses. Cutting losses. Cutting losses.

Psychologically, I tend to alter my activity depending on performance. I tend to be more aggressive after I have been winning, and less after losses. In contrast, a costly tendency is to get emotional over a loss and then get even with a larger position.

I risk below 5% on trade, allowing for poor executions.

If you never bet your lifestyle, from a trading standpoint, nothing bad will ever happen to you.

If a market doesn't respond to important news in the way that it should, it is telling you some thing very important.

When a market makes a historic high, it is telling you something. No matter how many people tell you why the market shouldn't be that high, or why nothing has changed, the mere fact that the price is at a new high tells you something has changed.

Over 98% of the masses are afraid to buy a stock that is beginning to go into new high ground, pricewise. It just seems to high to them. Personal feelings and opinions are far less accurate than markets.

The majority of unskilled investors stubbornly hold onto their losses when the losses are small and reasonable. They could get out cheaply, but being emotionally involved and human, they keep waiting and hoping until their loss gets much bigger and costs

It is better to do nothing and wait until you get a concept so right and a price so right that even if you are wrong it is not going to hurt you.

It should be written down as an axiom that you always invests against the central banks. When the central banks try to prop up a currency go the other way.

Ne pas chercher à gagner explicitement de l'argent pour un bien tangible précis (castle).

There are times during the day when I am sure that the SP is going up, but I dont try to pick the bottom and I am out before it tops. I just take the mid-range where the momentum is greatest. That to me, is trading like a sparrow eats.

Media say that market is down because of profit taking. The truth is the reason markets go down is because they take their loses.

Limit losses quickly. Most traders hold on their losses too long because they hope the loss will not got largest. They take profits too soon, because they fear the profit will diminish. Instead, traders should fear larger loss and hope for a larger profit

When you don't care, you do well, and when you try too hard, you don't do well.

Never add to a loser.

Successful trading is a matter of trying to avoid losses, but not being afraid of them.

Waiting for the right spot. Most people are ahead after their first five trades. They think: " this is great, like free money ". But they forget that the reason they made money on their early trades was because they wait a long time. They said: " I bet this is a good spot to buy it because I've seen the market act this way a lot of times ". And they made money. But all of a sudden they are doing a trade every day.

Bonds will take out one and two week highs or lows by a few ticks and then pull back.

Assume you originally planned to risk up to $5000 on a trade and quickly you are down by $2000. If at this point you start to think of the trade in terms of money (for example, the extra $3000 can pay for my vacation "), you might well liquidate the position even though you still believed in the trade. Get out because you no longer like the position but not because you have translated the risk into tangible terms.

Is part of the success willingness to not always do your own thing: You have to adapt to your success. If you make a lot of money and all of sudden you start to think you are infallible you forget the reason you were right was because of all those little factors that you followed. As soon you think " I' m the guy who is going to lead the way " you get slammed.

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Open interest Prices Expectations

UP UP higher prices

UP STABLE trading range

UP DOWN lower prices

DOWN UP short covering rally - watch for top

DOWN STABLE trading range

DOWN DOWN beginning of downtrend

STABLE any direction indecisive

Si ca va dans le bon sens mettre un stop loss pour avoir un résultat 0 minimum (frais compris).

Essayer de prendre un profit tous les jours.

The Trader's Edge by Grant Noble, McGraw-Hill 1995.

- No matter how intellectually stimulating or exciting to trade any trading method that, after expenses, couldn't beat a simple 18-day moving average system over the same period has to be dropped (add up the last 18 days of trading -open is better than close- and divide by 18) when the specific future opens above buy or when opens below sell.

- The greatest secret to investment success, outside of emotional control, is consistency. Compound interest is the eight wonder of the world. That's why most floor traders are delighted to earn 50% per year on their capital. If they can do that consistently year after year, in no time they will get rich.

- The theory of the opening Or the Psychological Law of 10/20 Percent: We have 168 hours in a week: 10%=16,8, 20%=33,6. The average worker officials puts in about 33,6 hours per week.

- Close price vs open price: What does the close reflect? A few hours of price exploration. What does the open reflect? The accumulated wisdom, the market events of many more hours of human existence. See the size of the closing range and the open range. It's the fear of what the opening will bring that causes many to daytrade and never hold a futures position overnight. Also the opening is more more likely to be near the low or high of the day than the close. The close is for the back office. About 60% of the time if the opening is higher the close is going to be higher.

- Open to the Up, Open to the Down Or the Rule of Three (3 minutes, 3 hours, 3 days, 3 weeks, 3 months, 3 years): If a gap stay open 3 minutes the market will go in the direction of the gap what it would normally be expected to move in 3 hours. If this gap stays open longer than 3 hours, the future will travel in the direction of the gap what previous action would consider a normal 3 day swing in prices.

When an open to the up or an open to the down is filled there us almost always a sharp reversal right after this happens.

- Each day has its own routine: Monday as the opening day often sets the tone for the week. Tuesday is often a top or bottom of a week. Wednesday has some of the most powerful trends of the week. If you must daytrade, Wednesday is your day. I believe the big money decides how next week is going to trade on Wednesday and trades accordingly. Thursday is an evening up day as the bigger traders are already maneuvering for the weekend. Friday is the fear day. If the low of the week is Monday the high will usually be in Friday. If the high is on Monday the low will be on Friday. Small traders finally decide to abandon their losing positions as they faced a weekend.

- Carrying charges: If the price of September future stays the same between now and September and you went long December Bonds, that's a 29% return. Carrying charges: It's the futures equivalent of selling an option with a large premium.

- The Rule of Doubles says that something has doubled in price, it is for a sell off. It applies to doubling the money invested as well (i.e. you take the money off the table when a future has returned a profit equal to the margin).

- When a year high or low is taken out floor trades go with The move. Forget everything about support and resistance.

- First through the Event: (1) the Approach. (2) The Touch. (3) First through the Event 5the future goes slightly beyond the even number and then reveres back to the approach number. (4) First Close through the Even. The first close above or below an even number is often the top or bottom of a move. Classically this close is immediately followed by a long term reversal.

- Trouver le Commitment of Trader (COT) report. Par 1: Commodity Trend Service, P.O. Box 32309 Palm Beach Gardens, Fl 33420, Tel 1-800-331-1069, Fax 1-407-622-7623. Ou 2: Pinnacle, 460 Trailwood Ct, Webster, NY 14580, Tel 1-800-724-4903, FAX 1-716-872-159

- Currency Adjusted (or Inflation -CPI-) Charting: Pour le CPI multiplier par le CPI et diviser par 100.

- The media. The best trading indicator. Just any market event a media story -whether print or electronic has the most impact during the first 3 hours after someone has seen it. Over the nest 3 days 80% of the contents of that story will slip from the memory. After 3 weeks only 3% of that article will be remembered.

(A) Determining what's important: is it news or is it emotional bias? (B) Judging the signal's intensity. (C) Is the signal long, intermediate or short term?

(1) Every important investment turning point gets put on the front page or the front cover. (2) In all markets, every important top (and most bottoms) gets prominent mention by more than one national media source.

(3) The more unexpected a headline, the greater the media signal. (4) Even when the media tell you the truth about a market it's never at the best time to take action (il faut attendre 3-4 semaines). (5) What the media expects almost never happens.

(6) The indicator the media attack as inaccurate is the indicator you should watch. What the media say you should watch, you can ignore. (7) If there is a " but " in the headline, the market trend continues.

Sun Tzu's Art of War for traders and investors by Dean Lundell, Mc Graw-Hill 1987, www.artofwar.com

Sun Tzu tell us that the wise general not only feeds off the enemy but rewards his soldiers with the spoils of victory ---> Since you are your own general, reward yourself. After you are victorious, call your brokerage or clearing firm and ask to be sent a check. By rewarding yourself, you will reinforce a winning attitude and state of mind.

Sun Tzu remind us that the important thing is victory, not persistence ---> Work smart as opposed to hard or for a long time. Consistently take profits regardless of size and increase your account equity and reward.

Sun Tzu said that the good warriors of old first put themselves beyond the possibility of defeat and then waited for an opportunity to defeat the enemy. Thus, the good fighter can secure himself against defeat but cannot be certain of defeating the enemy. Sun Tzu goes to remind us that the power to secure ourselves against defeat lies in our own hands.

---> We as traders or investors cannot control the market, only what we do in the market. We can discern victory, or how to make that victory possible, but we cannot manufacture it. Remember that we must asses the strategic picture first.89:89We cannot ca

Sun Tzu tell us there are five dangerous faults in generals: carelessness, timidity, a quick temper, fragility, and over-concern for troops ---> These faults can be found in many traders and investors as well. Do not be careless or reckless with your trading. You trade for profit, not for fun and games. Do not be timid; once you have identified an opportunity, attack. Act on it. Do not get angry over a losing trade and swear to get even. You won't. Do not get down on yourself for a losing trade, or even a string of losing trades. Find out what you are doing wrong and correct the problem. Do not fall in love with a stock, a bond, or anything else. You must learn that this is conflict, and you must be rather mercenary with your trading and investing.

Sun Tzu said that on temporizing ground, neither side will gain by making the first move. Even if the other side shows attractive bait, it is best to retreat ---> This concept is particularly true in the futures markets. If a market has a large move up, the next day market makers will open it even higher to flush out weak shorts. Once the panic buying subsides, the will then take it lower. The opposite pattern holds after a large down day. beware the " fade ".

Sun Tzu said that in narrow passes, you should occupy first with a strong garrison. If the enemy is there first, withdraw and do not attack ---> Nothing goes up or down forever. After a sustained move in either direction, markets will enter a protracted period of narrow range trading and consolidate. In the futures market this gives us two options: You can direct your attention elsewhere for other opportunities, or you can watch the commitment of traders and open interest for clues as to who is taking positions.

Sun Tzu said that on precipitous heights, occupy the high and sunny places and await the enemy ---> Most nonprofessionals traders and investors wait until they feel safe before buying or selling anything. Then they chase the market. This is one of the foremost arguments for getting in early. When they do start to chase the market, use that opportunity to liquidate your position.

Sun Tzu when asked if an army can be made to imitate the Shuai-Jan snake, replied that it can. ---> You must not only be flexible. You must learn to anticipate the adversary, plan your response, and execute without hesitation. The number du jour in recent times has been the monthly non-farm payroll. Bond prices can and do have violent reactions if this number is a surprise. To put a position on prior to its release is not trading, it's gambling. To be like the Shuai-Jan snake, you could have stop orders on both sides of the market, or you could use both puts and calls. In either case, once the number is released, sell the loser and add to the winner. Let the people that are wrong help drive your position. Exploit their weakness.

Sunt Tzu concludes this lesson by admonishing us to lead an army as if it was a single soldier. When in danger, a soldier will strive for victory. He who focuses on the enemy can kill from a great distance. ---> Many traders will look at an opportunity and see only the risk or how badly they can be hurt. You must learn to see the reward side of the equation, to keep a single-minded purpose of winning and not be distracted from the task at hand.

I said in the beginning of this text that Sun Tzu has changed the way I view the markets. You have noticed that there are no magic oscillators. No mystical technical indicators. What Sun Tzu teaches throughout The Art of War is taught to asses the opponent and the strategic situation, to be flexible and learn to adapt to an ever changing environment, and finally to employ tactical methods and know when to strike and when not to strike. Most of all, what Sun Tzu has taught me is to think clearly. I hope he has done the same for you.

LINDA BRADFORD RASCHKE. Time Tested Classic Trading Rules for the Modern Trader to Live By.

This is a list of classic trading rules that was given to me while on the trading floor in 1984. A senior trader collected these rules from classic trading literature throughout the twentieth century. They obviously withstand the age-old test of time.

I'm sure most everybody knows these truisms in their hearts, but this list is nicely edited and makes a good read.

1. Plan your trades. Trade your plan.

2. Keep records of your trading results.

3. Keep a positive attitude, no matter how much you lose.

4. Don't take the market home.

5. Continually set higher trading goals.

6. Successful traders buy into bad news and sell into good news.

7. Successful traders are not afraid to buy high and sell low.

8. Successful traders have a well-scheduled planned time for studying the markets.

9. Successful traders isolate themselves from the opinions of others.

10. Continually strive for patience, perseverance, determination, and rational action.

11. Limit your losses - use stops!

12. Never cancel a stop loss order after you have placed it!

13. Place the stop at the time you make your trade.

14. Never get into the market because you are anxious because of waiting.

15. Avoid getting in or out of the market too often.

16. Losses make the trader studious - not profits. Take advantage of every loss to improve your knowledge of market action.

17. The most difficult task in speculation is not prediction but self-control. Successful trading is difficult and frustrating. You are the most important element in the equation for success.

18. Always discipline yourself by following a pre-determined set of rules.

19. Remember that a bear market will give back in one month what a bull market has taken three months to build.

20. Don't ever allow a big winning trade to turn into a loser. Stop yourself out if the market moves against you 20% from your peak profit point.

21. You must have a program, you must know your program, and you must follow your program.

22. Expect and accept losses gracefully. Those who brood over losses always miss the next opportunity, which more than likely will be profitable.

23. Split your profits right down the middle and never risk more than 50% of them again in the market.

24. The key to successful trading is knowing yourself and your stress point.

25. The difference between winners and losers isn't so much native ability as it is discipline exercised in avoiding mistakes.

26. In trading as in fencing there are the quick and the dead.

27. Speech may be silver but silence is golden. Traders with the golden touch do not talk about their success.

28. Dream big dreams and think tall. Very few people set goals too high. A man becomes what he thinks about all day long.

29. Accept failure as a step towards victory.

30. Have you taken a loss? Forget it quickly. Have you taken a profit? Forget it even quicker! Don't let ego and greed inhibit clear thinking and hard work.

31. One cannot do anything about yesterday. When one door closes, another door opens. The greater opportunity always lies through the open door.

32. The deepest secret for the trader is to subordinate his will to the will of the market. The market is truth as it reflects all forces that bear upon it. As long as he recognizes this he is safe. When he ignores this, he is lost and doomed.

33. It's much easier to put on a trade than to take it off.

34. If a market doesn't do what you think it should do, get out.

35. Beware of large positions that can control your emotions. Don't be overly aggressive with the market. Treat it gently by allowing your equity to grow steadily rather than in bursts.

36. Never add to a losing position.

37. Beware of trying to pick tops or bottoms.

38. You must believe in yourself and your judgement if you expect to make a living at this game.

39. In a narrow market there is no sense in trying to anticipate what the next big movement is going to be - up or down.

40. A loss never bothers me after I take it. I forget it overnight. But being wrong and not taking the loss - that is what does the damage to the pocket book and to the soul.

41. Never volunteer advice and never brag of your winnings.

42. Of all speculative blunders, there are few greater than selling what shows a profit and keeping what shows a loss.

43. Standing aside is a position.

44. It is better to be more interested in the market's reaction to new information than in the piece of news itself.

45. If you don't know who you are, the markets are an expensive place to find out.

46. In the world of money, which is a world shaped by human behavior, nobody has the foggiest notion of what will happen in the future. Mark that word - Nobody! Thus the successful trader does not base moves on what supposedly will happen but reacts instead to what does happen.

47. Except in unusual circumstances, get in the habit of taking your profit too soon. Don't torment yourself if a trade continues winning without you. Chances are it won't continue long. If it does, console yourself by thinking of all the times when liquidating early reserved gains that you would have otherwise lost.

48. When the ship starts to sink, don't pray - jump!

49. Lose your opinion - not your money.

50. Assimilate into your very bones a set of trading rules that works for you.

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