ANNOUNCING A NEW BOOK ON FUTURES TRADING

"INTELLIGENT FUTURES TRADING"

by

Chick Goslin

$55.00 US - Plus $3.00 Postage & Handling

We have included a twenty page excerpt for your perusal.

Granted, a sixty-five dollar book is expensive; but even one cent is too much to pay for a book that is of no help, and virtually any amount is "cheap" if it truly helps you become a successful futures trader. This new (July,1996) book, "Intelligent Futures Trading" will help you.

I have spent over twenty-five years in the futures trading business and over this period have made (and lost) millions. I have learned what it takes to be successful, and have found out (painfully) what causes failure. There is an intelligent way to go about trading futures and my book clearly explains what this way is. Follow the general advice and the specific momentum based trading method in this book, and you will be a tough, competitive trader. This 190 page book is divided into six sections: Introduction, Approach, Understanding, Self-Knowing, Learning and Acting. As a "sample," I am providing the contents pages plus the first sixteen and last four pages of the book for free. (For obvious reasons I have not provided any details of the specific trading method.)

This book is not a "fantasy--get rich quick" book; it is a clear, serious, insightful, no-nonsense, easy-to-understand presentation on how to intelligently trade the futures market. If you are serious about being a successful trader, do yourself a favor, buy this book by or send a check or money order for $58 to:

_{WINDSOR BOOKS
P.O. Box 280
BRIGHTWATERS, NY 11718}

Upon receipt of your check a complete version of this book will be mailed to you promptly, via priority mail. This price includes postage and handling.

(Warning: NOT for conventional thinkers or those seeking certainty.)

CONTENTS

INTRODUCTION

Just as a well-equipped intelligent "woodsman" can survive, even thrive, in any forest; so too can an educated, intelligent "trader" survive and prosper in any market environment.

The Futures market is a vicious, hungry predator. It feasts on the unaware, the unprepared, the uneducated. Fact: Less than twenty percent of individual traders end up winning, so by definition an individual must be extraordinary to succeed at futures trading. There are only a few paths to success in futures trading, and the most reliable of these is that of "intelligent" trading.

This book will provide its reader with valuable insights on trading and show him or her how to be an intelligent trader. Pay attention and you will learn how to become one of the extraordinary few who consistently trade the futures markets profitably; then it will be up to you to turn these words and theories into action. Be very clear on this point: The failure to actually do what one has so diligently learned to be intelligent and wise is a primary cause of trading failure.

Trading the Futures Markets is a risky business. No one, neither I nor anyone else, can guarantee you profits. What has worked in the past may not work in the present or future. However, every word, every sentence, every "rule" in this book has been carefully chosen and constructed. There is neither padding nor filler, only essentials. This book was put together on the assumption you, its reader, are interested in enlightenment, not entertainment. Its purpose is to help you become a tough, competitive, intelligent futures trader--exactly what you need to be to succeed in this difficult and challenging business.

Why is this book titled "Intelligent Futures Trading?" Why not "successful" or "profitable?" Isn't being successful and profitable what every trader seeks? As long as you get rich, why should you care what kind of trader you happen to be? Dumb, intelligent, dull, sharp, stupid, clever, what difference does it make as long as you make a lot of money? In futures trading the only thing that counts is the bottom line, right? Well yes, but.......

First, the true reasons each of us expend time and energy on anything are often neither clear nor simple, even, or especially, to ourselves. The true objective is not always money. Study any exceptionally successful person and invariably you will find the primary force behind their drive to succeed was their passionate pursuit of excellence, not profit. The most successful athletes, artists, performers, and business men and women strive first and foremost to play, act, perform and execute "well ," and then only secondarily to make money.

Second, successful futures trading is a result; and as such it cannot be forced to happen. Success is simply a result of personal energy effectively directed; it is an end-product of process . The most effective direct action an individual can take to achieve success in any endeavor is to focus time and energy on understanding and perfecting the how, the way, the process. Process produces result, not vice versa. So if you want to become a successful futures trader, spend your time and energy learning the how, the way, the process of trading. Spend your time and energy learning how to be an intelligent trader.

Trading the futures markets is not easy. The bad news about trading futures is that most people lose; but the good news is that futures trading is a zero-sum game. So the few people who do end winning can, and do, make astounding, sometimes almost unbelievable, amounts of money. And the really good news is that successful futures traders do not have to be natural-born; they can be self-made. This truly is the best aspect of futures trading; you do not need to be blessed with any special natural-born talents to be successful.

The fact is that no matter how much time and energy you or I might expend, we could never win the Olympic Gold Medal in the 100 meter dash, or the U.S. Open in golf or tennis, or star in the NFL or NBA, or be a lead singer with the Metropolitan Opera, or be awarded a Nobel Prize in science or mathematics. Certain accomplishments are inherently beyond most of us. However, virtually all of us naturally possess all the abilities necessary to become successful futures traders. Unfortunately, though, while many of us could become successful traders, only the rare individual actually does. The overwhelming majority of those who trade futures fail--almost all betrayed, not by fate, but by nothing more than emotions, instincts and conditioned behavior. Fear, greed, and normal thought processes combine to bring about defeat. Never forget this point. You will always be your worst enemy in futures trading, not your luck, not other traders, not unexpected news events and not the "markets." But this is actually more good news. Because you cannot do anything about luck, other traders, the news or market behavior; but you can do a great deal about yourself.

What you will find in this book is some very painfully acquired wisdom, plus "a" specific trading method. But keep in mind that in futures trading, as in every other human activity, there are many acceptable methods . Each individual trader needs to find the particular technique, style and method best suited to his or her personality. If the specific momentum system laid out in this book does not seem to "fit" you, then don't use it. There isn't a universal best way to trade futures, but there is a best way for you to trade futures. Your job, as a student of the game, is to pick and choose from all you encounter in your studies and then construct your personal trading techniques, style and method.

This book is specifically about Futures trading; but its observations and ideas can be used to improve your understanding, self-awareness, knowledge and actions in any type of trading--whether it is futures, stocks, bonds, stamps, paintings, real estate or simply trading today for tomorrow.

For the past twenty-five years I have watched and traded the futures markets on an almost constant, daily basis. I started as a casual amateur trader and out of curiosity obtained a temporary job as a "runner" and phone clerk on the Chicago Mercantile Exchange. But like so many others before me, once exposed to this fascinating business, it did not take long before I was "hooked." From the floor of the "Merc" I moved on to become an account executive with a small commodity firm and later a top producer for a major NYSE firm (E.F.Hutton). Over the years I have managed many trading accounts for other people (most of them successfully, but some not). Seventeen years ago, at the age of thirty-five, I was able to retire from daily salaried work and have survived (sometimes exceptionally well, other times rather poorly) as a professional trader ever since.

Over the course of this quarter of a century of trading I have had, and personally witnessed others have, periods of phenomenal success. Once I watched a client run $10,000 up to $3.5 million in seven months and then proceed to trade his way right back down to $50,000 over the next two months (although he did take out $200,00 on the way up). I have gone through periods of trading my own account where my success was so consistent I rarely had any losing days, and for a period of time I even came to consider anything less than fifteen thousand dollars a day in profits inconsequential. Over the years I have had my share of hundred thousand dollar "up" days and million dollar "up" years. Unfortunately, I have also suffered through periods of devastating failure during which I have lost basically everything.

During my successful periods I approached trading with great passion and consistently acted in a sane, rational, intelligent manner persistently following certain "rules" experience had taught me to respect. My periods of failure, on the other hand, have always been marked by lack of passion, chronic breaking of these same rules and far too much stubborn, obstinate, opinionated trading. In other words, the record shows that while I have been at times a good, sometimes even great, trader, I am definitely not a natural-born market genius. The truth is the markets do not obey my commands. And overall, though my trading career has shown many extended periods of extraordinary brilliance, the end results are that I have not been one of the world's most successful traders.

Why then should you spend your precious time reading what I have written? Why should you pay any attention to my words and theories, advice and suggestions?

Two reasons. First, futures trading is in many ways similar to professional sports. Pick any sport and select its best players and its best coaches and teachers. How many names appear on both lists? Very few. The best players are rarely the best teachers; the best coaches were rarely the best players.

Doing something exceptionally well and being extraordinarily good at helping others perform that same activity well are two very different talents. Futures trading is no exception. It takes a certain amount of failure to find a good approach, learn sound techniques and discover a viable method. Protracted periods of extreme success occasionally are simply the inevitable result of innate talent. Often those blessed with natural talent are actually less likely to be good teachers because they have never been forced to learn for themselves the most effective way of acting. All they needed to do in order to succeed was polish their natural talent. Unfortunately for those of us who are ordinary, exceptional natural talent simply cannot be taught.

However, the fact that I have failed and succeeded so many times, over so many years, is strong circumstantial evidence that I must know something about how to do both. Actually multiple successes and failures have given me frequent and repeated opportunities to observe and understand the root causes of both. This acquired knowledge can be passed to another.

Second , since I am not a proven and publicly acknowledged "market genius" I have absolutely no official authority; therefore, you will not blindly accept what is in this book. Instead, you will (or should) read it with a "prove it to me" attitude. And since I have no authority, you will be forced to find out for yourself whether my observations on approach, techniques and trading methods are true and effective. This is good. True enlightenment can never come through the words of another, no matter how great that individuals' reputation or "track record" might be. Real awareness comes only when you find truth for yourself, directly, through your own eyes, from your own experiences.

You will never gain true understanding of anything solely from being told by another, no matter who does the telling. You will only truly understand, and thus have confidence in the truth of your understanding, when you see and experience for yourself. Actual direct experience is far more likely to produce clear, decisive action than the most clever words from the greatest trader. Under stress, an individual's normal thought processes break down and his or her brain searches for something solid, something known, to rely upon. When the pressure is on, as it frequently is when trading futures, you need a "trading intelligence" you can depend on, and, if necessary, even rescue you in an emergency. Possessing a sound trading intelligence will give you the capability of being a successful trader in any market environment. Having a valid trading intelligence will make you independent. It will make you, in a word, a "trader."

So be smart, question everything in this book. Challenge every statement. Test every trading rule. If you find anything to be false for you, toss it out and erase it from your memory bank. Keep only what you can verify to be true and worthwhile. Do this diligently and you will soon possess an approach, technique and method of your very own--your personal trading intelligence. An intelligence you can consistently rely on because it will have been built on truths seen through your eyes and verified by your experiences--not simply clever words and elaborate theories learned from another.

However, be aware, if you should learn these lessons well and be fortunate enough to experience some sustained success, this very success will almost certainly begin to create in you a false, "distorting" form of confidence which will eventually cause failure. Success tends to obliterate the humility that served to produce it. And without humility one cannot "see" clearly, vision becomes distorted, and failure reappears. Sustained success too often is taken as proof that markets follow your orders; when in truth, successful trading is invariably nothing more than the natural, inevitable result of you following the market's orders. If (or more accurately, when) you fall into this particular psychological trap, and you are reintroduced to the pain of failure, remember these words and go back to the foundation of your earlier success--humility.

A common end-result of sustained success in "subjectively" judged endeavors is nothing more than a well-polished mediocrity. In most businesses this success-generated mediocrity can be, and is, hidden by reputation. Famous politicians, television news personalities, movie stars, senior business executives, and others can maintain their positions of superior status long after this "success produced mediocrity" settles over them. Futures traders cannot. When you trade in the futures markets, your reputation and past successes (or failures) have zero bearing on future success or failure. The futures markets are absolutely oblivious to who you are or were, or what you have or haven't done in the past.

Before we go any further, be very clear about what you are dealing with here. Futures trading can be a very brutal business. If you let it, futures trading has the potential to destroy you. Fortunes far, far greater than yours have been lost in this business by individuals at least as clever as you. Never, ever underestimate the dangers of trading the futures markets. They are populated by people and organizations who will not flinch in the slightest as they take everything they can from you. Futures trading is for consenting adults only.

The charts in this book, and the data for constructing the momentum lines the trading method uses, are provided by:

SMR
(Security Market Research)
P.O. Box 7476
Boulder, Colorado 80306-7476
(303-494-8035)

I am not affiliated with "SMR" in any way. I have been a subscriber for over twenty-five years and have always found their service and charts to be excellent. I recommend them wholeheartedly and without reservation. While the momentum trading rules detailed herein are based on "SMR's" momentum lines, I am confident these rules would be just as effective with any other similarly constructed momentum indicators. SMR's daily momentum line data are available by telephone recording (303-494-5020), FAX, and on the Internet World Wide Web at http://www.smr.com.

(Note: SMR also publishes "stock" charts with the same momentum lines. I have never traded stocks; but the basic approach, techniques and methods in this book apply equally well to stocks.)

APPROACH

Approach first, method second.

Approach means how you go about "doing" or "acting."
Approach is about choosing a likely path to solving a problem.

When faced with any problem, the first and most important step is the approach.
Correct approach invariably exposes and presents a good, sometimes even the best, method.

A passion for the truth is the essential element of a sound approach to trading.

Approach also means the attitude an individual brings to any activity.

A good attitude for futures trading is one filled with a healthy curiosity about the future, always eager and interested to see what will happen next.
A futures trader should approach each new trading day with the healthy curiosity of a passionate observer.

A trader needs to be like a researcher in an unexplored forest studying a newly discovered wild animal. Eager to learn, searching for the truth, curious as to what will happen next, intent on observing habits and patterns, looking without preconceived opinions or fear.

The primary motive is to observe, learn, and then act intelligently.

A good attitude for trading is one free of excessive fear.

No fear because the trader has made the effort to possess the trading intelligence and decision making capacity necessary to handle whatever the future brings.

In the futures markets there is no need to be afraid. These markets are not random; they are flowing. Their pasts, presents and futures are related. There is an observable flow from past to present; and this flow is a reasonably reliable indicator of the future. Occasionally there will be major surprises, but that is the nature of the future. As it is not yet made; it is by nature unknown.

The past is knowable.
The present is observable.
The future is intelligently guessable.

The past is already made, so it is permanent. Only something permanent, unchanging, can ever be known. Therefore, the past can be known.
The present is evolving; it is happening. That which is happening can be seen. So the present can be observed.
The mold of the future is built in the past and refined by the present. However, the actual future is yet-to-be-made and thus will always be unknown.

Only the present is alive and to be alive means to be constantly changing.
If the present is alive and constantly changing, then the present's future must also be everchanging and thus always unknown.
So, the future can never be known nor perfectly predicted; but the known past and observed present will always indicate a "probable" future.

The future is thus in between unknowable and predictable.
It is more than random, but less than certain.
It is intelligently guessable.

So, how do you make these intelligent guesses about the future?

One approach to solving this problem is to follow these four steps:

First, understanding.

Second, self-knowing.

Third, learning.

Fourth, acting.

UNDERSTANDING

The Essence of Futures Trading

Futures trading is not complicated; it is a simple business of betting on the future direction of constantly moving numbers.
Sometimes these numbers move quickly; sometimes they move slowly.

These numbers are differentiated by their names: Cattle, coffee, corn, Swiss Francs, D-Marks, gold, silver, treasury bonds, etc.
The objective of this numbers business is simple and unchanging: Sell the numbers higher than you buy them, buy lower than you sell.

A trader should treat futures trading as a business, but approach it as a game--a simple game of guessing the future direction of endlessly fluctuating numbers.

So focus on learning how to play the game well, not on making money.
Because if you play the game well, profits will come naturally.

The Nature of the Game

Futures Trading is a zero-sum game.
Every dollar one trader makes, another has to lose (and vice versa).

(Note: In real estate and the stock market, virtually everyone is a "buyer" and all either win or lose together. The futures market is like a poker game, money simply moves back and forth between the players. Remember, what is traded on futures markets are "contracts"--contracts to buy or sell a product at a specific price in the future. A contract is an agreement between two parties--the prospective buyer of the product and the prospective seller. If the price goes higher the buyer profits and the seller loses (and vice versa). So in the futures markets for every "long" there is, by definition, a matching "short." What you gain another loses; what you lose another gains. It is simply a competition; no, more than competition, it is financial warfare. And in this war, mercy is frequently requested but only rarely, if ever, given.)

You are trading against the wealthiest and most knowledgeable people and organizations in the world.

Do not delude yourself, you cannot compete on their terms: information, knowledge, experience, staying power, and so on.

(Note: For example, if you are trading the currencies, you are competing [trading] against the Central Banks of the world, the major money center banks, large international corporations, etc. No matter how extensive and current your information, their information will be more extensive and more current. No matter how experienced you are, they will be more experienced. No matter how well connected you are, they will be better connected. No matter how big and fast and clever your software and computer are, theirs will be bigger and faster and more clever. Do not waste energy trying to play the game on their terms. Since you cannot compete with them at their level, bring them down to yours. You can do this by reducing the business of Futures Trading to a simple up and down numbers game. Approach trading this way and you will have a chance to compete successfully. For example, you would never be able to beat the heavyweight champion of the world in actual boxing, but you might be able to beat him consistently in a computer simulation of boxing.)

So spend your time and energy learning how to be an intelligent trader, not in trying to compete in ways you cannot.
Because you can compete in the futures trading game, if you change the way you define it.

What vs Why

Do not spend time and energy trying to figure out why a price moves.
Focus all your attention and energy solely on what the price is doing.

(Note: You are a trader. A trader does not get paid to understand or explain why something has happened. The question "why?" deals with the past. The question "what?" deals with the present and provides the best clues to the future. And never forget that you are trading "futures," not "pasts."
Discovering the supposed "why" of a price move will provide you with little more than temporary intellectual comfort. Whereas observing and focusing on what the price has done and is doing will help you anticipate what the price will do in the future. Leave the intellectualizing to those paid for their words not their deeds, i.e., journalists and brokerage house analysts.)

For short-term trading purposes, almost all information on the big picture of supply and demand is useless.

(Note: Pay more attention to how a market reacts to supposedly bullish or bearish news and reports than the actual information itself. With a few exceptions--pig crop reports, some of the growing season crop reports, some economic reports--you shouldn't worry too much about news and reports. Reports and news events are part of a traders life; they are always going to be coming at you. Focus on what the prices have done and are doing; that's what counts.)

If you know something, assume everybody knows it.
Always operate on the assumption that you are at the tail end of the information chain.

Looking vs thinking; Observing vs Analyzing

Don't think. Look.
Don't analyze. Observe.

(Note: Let your eyes determine your opinion, not your thoughts. Observing simply means looking at a chart to see where the market has been and where it is; looking at whether the trend is up or down; seeing whether the momentum lines are going up or down, or are high or low, or are moving fast or slow; seeing whether the market is on a recent high or low, and so on. Let what you see be your guide, not what you think. The odds will always be against you in the thinking (knowing) competition. The institutions you are competing with invariably will have more knowledge, more information, more of everything than you; but in the seeing competition you can be their equal, or even their better.)

Opinions formed by analyzing fundamental supply and demand are rarely helpful and not really necessary in order to be successful.

(Note: No need to spend time and energy analyzing the fundamental supply/demand situation of a market in order to decide whether to be bullish or bearish. Just look at the chart. If the trend is up, your bias is bullish; if it is down, bias is bearish. Let the trend determine your bias.This doesn't mean you cannot trade against the trend, it only means your bias should always be with the trend. Not only is this a more effective way to trade, it is considerably easier.)

Making Predictions

Avoid making specific predictions about the future.
Making predictions will do you no good and can do you a lot of harm.

(Note: Predictions tend to lock you into a preconceived scenario of the future making it more difficult for you to adapt to unforeseen events.Futures trading is not like betting on a horse race. In futures trading you can change your bet as the race progresses. In trading, as soon as you make a specific prediction about where a market is going, you sacrifice your freedom. A trader must always feel free to change trading positions on very short notice. And most importantly, you do not need to be good at predicting to do well at trading. If making predictions can be quite harmful and you do not need to be good at predicting in order to be successful, why bother with predicting at all?)

Recognize that in-depth analysis of the fundamentals and making accurate predictions are simply not necessary for successful trading. Analysis and predictions actually hinder your ability to see and act clearly.

Now, having seen how dangerous fundamental analysis and making predictions can be, know that they will always appear to be quite harmless, even inviting.

You will be constantly tempted to analyze and predict.Do so if you wish, just be aware of the dangers and try to adjust accordingly.

(Note: It is human nature to want the feeling of security that analyzing and predicting can provide. It is natural to want to impress yourself, and others, with an ability to predict the future. We all want to feel secure. We would all like to be known as brilliant "seers." If you must analyze and make predictions, then analyze and forecast politics, sports or movies. Let others boast of their knowledge and market clairvoyance; let trading "well" be your satisfaction.)

Talking about reality is not reality; what you do is reality.
Analyzing and predicting the markets is only talking about reality; what the markets do and how you react to what they do is the reality that counts.

Humility and Arrogance

Observe with humility.
Act with arrogance.

When observing, step aside and let humility in.
When acting, banish even the concept of doubt.

When looking at a chart, look with maximum humility.
When acting on what you see, act with total arrogance.

(Note: Humility comes when you admit the truth, which is that you do not know what is going to happen. You can only see clearly the truth of the past and present when you look with humility. And accurate knowledge of the past and a clear vision of the present are prerequisites to successful action.
Then once you act, a touch of arrogance will always help you act more decisively.)

See through your eyes,
Act from your intellect.

(Note: Eyes see, intellect does. Your eyes are the navigator, your intellect the pilot. Your eyes tell you what , which way and approximately when to trade; your intellect decides how many contracts to do and precisely when to act. Understand that the psychological you, the you made up of all your past successes and failures, the you full of hopes for future success and fears of future failures, the you filled with all this extraneous psychological clutter, this you has no role to play in the seeing and acting of trading--this you merely enjoys or suffers the fruits of your trading. Let images enter through your eyes, detour around your emotions and memories, and impact directly on your trading intelligence so it can then act freely and clearly. Let your eyes send uncontaminated sights to your trading intelligence so it can then act as you have conditioned and trained it to do.)

Uncertainty, Vision, Fear, Intelligence, Security and Confidence

To trade futures is to live in a state of constant uncertainty.
To survive and prosper in this environment requires clear vision, the guidance of a trading intelligence containing, at a minimum, an accurate knowledge of the past, plus the capacity to act decisively.

Futures trading is always uncertain and therefore sometimes frightening.
In such an environment you need to understand what you are dealing with, you need an unbiased humble brain, you need to be able to act.

Fear distorts vision.
Intelligence displaces fear.

Security in trading will come when you have learned how to be intelligent.
Confidence in trading will come when you INSIST on acting intelligently.

(Note: Ask yourself these questions: Do you want to momentarily satisfy your urges and desires by just buying and selling whatever you want, whenever you feel like it? Or do you want to be successful and become one of the elite few who take all the money? If you want to be a winner, you will have to consistently make your trading decisions based on what you actually see, not on what you wish you were seeing. And then having seen clearly, you must ACT!)

A Traders Constant Objective Should Be To Trade Intelligently

Trading futures is like a voyage down an unexplored river.
You cannot know what lies ahead, but you can know where the river has been, you can see which direction it is moving, and you can measure how fast it is flowing. Then once you have done all this, you can make an intelligent guess as to where it will most likely go next.

You cannot know the future, but you can know the past and you can calculate the direction and momentum of the present.
Do this well and then you will be able to make an intelligent guess about the future.

A FEW FINAL THOUGHTS

Markets come in and go out of favor. Today's "hot" market can become tomorrow's dullard. However, if you learn how to be an intelligent trader, you will be equipped to trade any market, at any time.

I have given you a "model" approach and method. The purpose of any model is to provide ideas, possibilities. If you cannot make my particular momentum method work for you, look for another. What you need is a trading method reliable enough to generate the confidence to act decisively. But remember, you are trading the price; so make sure your method is based on the movement of the price.

Each trader has a unique personality. Each trader has a different amount of time and energy to devote to trading. Do not try to trade exactly as another. You can never achieve optimum performance by copying another, no matter how successful the other. The best way to optimize results is to create a "trading style" of your own, one that fits you and one that gives you confidence.

Every year, in every competitive activity, champions are crowned. All these champions share one common characteristic. It is not natural talent; it is hard work and perseverance. Look at any champion. No matter how great the natural talent, he or she has worked, and continues to work, long and hard at what they do. Futures trading is no different. Casual indifferent trading by a futures trader is as unlikely to be successful as indifferent play by an athlete or musician.

Trading takes time and energy. We have to train ourselves to habitually act intelligently--especially when under pressure. It takes effort to stay focused on essential truths, to control emotions, to pay attention to reality, to act intelligently. You have to work hard at this game. It is not easy.

If you do not have the time and energy to pursue becoming a champion trader, limit your objective. Play within your capabilities of time and energy. Do not try to do more than is possible. If you are unable to watch and trade the markets on a constant, real-time basis, limit the number of markets you watch and trade. Place contingent orders above and below each market, every day. Before every trading day ask yourself: "Would I want to take some action if this market traded or closed up here, or down there?" Consistently placing "resting" orders in "good" price areas is an excellent way to achieve good entry and exit points. Chance always favors the prepared trader.

Do not fight reality. Do not fight the price. Do not fight the momentum. Do not fight the trend. Do not fight the lines. Do not try to impose your will on reality. No matter how strong-willed you are, reality is stronger.

Embrace reality. Do not resist reality, go with it. Look at each day's reality as a sometimes maddeningly unpredictable, frequently deceptive, but always intriguing newcomer--constantly changing, but always worth intense curiosity and observation. The cleaner your relationship with reality, the better your chances for success.

Trade with the flow of prices; try to ride the surges of market energy. Look at the charts: Price momentum, once underway, takes time to dissipate--so do not be reluctant to position after momentum is clearly underway.

Only trade with money you can afford to lose. If you cannot afford--either psychologically or monetarily to lose--you really cannot afford to play.

Memories, emotions, desires are debris on your window to reality; to see clearly you need to continually clear these away. Clear vision is meaningless without a sound intelligence to interpret it; and the best plans are worthless unless implemented. Clear vision, sound intelligence, decisive action.

To trade you have to act. Sorry, there is no way to play the game without acting. Trading is constant acting (even if, and when, deciding not to act).

We learn best by doing. We learn most by failing. At some point, each of us has to actually do; and no matter what it is we are trying to do, learning to do it well requires a certain amount of trial and error.

Frustration and aggravation are sometimes synonymous with trading. Even the best traders get frustrated, aggravated. All traders experience bad times. No approach or method works all the time. Your best chance for ultimate success is to play the probabilities and persevere.

Trading is anticipating and reacting, reacting and anticipating. Try your best to get your timing right; accept that you will rarely do so exactly. Learn what you can from your mistakes, then forget them. However, do not ever forget this: Never, ever, accept the mistake of being wrong for long.

Anyone who trades will know some failure; but success is possible. You can teach and train yourself to play this game well. And when done well, trading can be enormously satisfying. Work at this game, apply yourself. Train yourself to be an intelligent trader.

Let go of the need to be right; reach for the feeling of doing well. What does well mean? It means playing the game intelligently. What does intelligently mean? It means acting based on reality, on the truth; which means seeing what works and then acting on what is seen.

If you're going to trade futures, you might as well do it correctly; and doing it correctly means doing it intelligently. Look at reality. Futures trading is a competition. It is financial warfare. You are trading against thousands of smart, aggressive, extremely well-informed, very well financed, extensively experienced professionals. Look at the facts! Over eighty percent lose; so by definition the average trader (even the well above average trader) is going to lose--eventually.

The average trader relies too much on feel, on intuition. The possibility that any one of us is a natural market genius is realistically somewhere between zero and none. Accept that you will never be a world class athlete, sing a perfect musical note, or find a theory beyond relativity; and neither will you ever reliably predict the future. But be aware that you can know the past and see the present.

The average trader focuses too much on big payoffs. This is a stock market mentality, i.e., buy it and ride it to the sky, or sell it before the crash. Trading is not about predicting and catching the "big" moves. This is "fantasy" trading. It is the "lottery" approach to trading which, in the end, pays off only for a very, very few. Trading is about "seeing" momentum and positioning with it, "seeing" trend and following it.

The average trader wastes time and energy attempting to "out-clever" the market through excessive analysis, thinking, knowledge, information, and so on ad infinitum. Of course anything is possible, but this particular "pathway" to success is extremely crowded with very bright and well financed individuals and organizations. Look at your competition. Do you really think you can "out- compute" the best and the biggest in the world? Unlikely. The more complex and complicated it is, the less likely you will be able to compete; so keep it simple.

The average trader is occasionally adept at initiating positions; but invariably inept at liquidating positions, i.e., profits are never quite enough, losses always too big. Remember not to become attached to your trades.

The average trader focuses too much on predicting the future direction of markets; and pays too little attention to what he or she did in the past. Know yourself. Be aware of your past actions and reactions. We all tend to repeat our mistakes. The most valuable story you will ever read is the "book" of your past.

The only realistic chance an average (or above average) trader has to consistently trade futures profitably is to recognize it as warfare but approach it as a game, find and learn a reasonably reliable method, pay attention, and then act on what is seen.

It is a waste of time and energy to see the importance of buying the strong and selling the weak, unless you do so.

It is pointless to see that most trades should be with the trend, unless you do most of your trades with the trend.

It is meaningless to see that most money is made with the momentum and lost against it, unless you act on this vision.

This book points a way, provides a map and shows a "how." If you see the truth of it, with effort you can learn, and with self-insistence you will act. You can beat this game. You can be a profitable trader. Pay attention to market reality, and then consistently, persistently and insistently act intelligently--all day, everyday. Cultivate your trading intelligence and apply it to every decision, one decision at-a-time, one decision-after-another.

Should you ever become aware that you have lost control and are just "firing" blindly there is only one thing to do: Close out all positions, walk away for a while, restore your patience and humility, and then start over--slowly.

Almost all of us are slow learners when it comes to acting intelligently on a consistent and persistent basis. Do not be too hard on yourself. Recognize that "final" learning is an illusion; all there can ever be is constant awareness and then consistent and persistent acting on that awareness.

You cannot change reality; but you can change how you react to reality. You cannot change today; but how you act today, will shape tomorrow.

The most likely path to success is clear--be intelligent. To become a more successful trader, be an intelligent trader.

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Brightwaters, NY 11718

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