From: Jeff Danoff
Sent: Thursday, October 13, 2005 8:09 AM
To: Earl Spencer
Cc: Jim Goulding
Subject: For 12 years, Cook has kept a daily diary of trading patterns
Trader Mark Cook Reveals His Rules for Day-Trading Markets
                  By Jim Wyckoff
                  (Note: I wrote this story a few years back, when I was a
                  journalist with FWN.)
                  A day trader is a cross between an extrovert and an introvert,
                  with both characteristics in balance, according to Mark Cook,
                  a veteran trader from East Sparta, Ohio.
                  “The introvert aspect is depicted by the disciplined
                  workaholic with a reclusive concentration. The extrovert
                  aspect is depicted by an aggressive, competitive,
                  self-motivated individual striving to be the best in a
                  selective profession,” said Cook.
                  Cook won the 1992 U.S. Investment Championship with a 563%
                  return on his money. He is a featured speaker at the Telerate
                  Seminars Technical Analysis Group (TAG 20) conference held
                  here this weekend.
                  Each trading day, “I am a creature of habit, going through a
                  daily ritual before the markets open. I outline in detail all
                  three possible scenarios for that day: up, down or sideways. I
                  assign a probability to that scenario and make a written
                  strategy plan, which has been incorporated into a trading fax
                  service that is devoted to teaching people how to trade. Thus,
                  a disciplined trading plan is imposed on me.”
                  Every day trader must be “flexible, alert and feisty,” said
                  Cook. The flexibility must be used to shift from being long to
                  being short “literally within seconds.” The alertness is used
                  for observing price movements that are an aberration from the
                  norm, he said. “Feistiness is the savvy aggressiveness to
                  fight back with a vengeance to regain money you lost. I don’t
                  know how many times I’ve seen people lose money in the morning
                  and quit. My most profitable days are when I lose money in the
                  morning and stay in because I want to get it back.”
                  For 12 years, Cook has kept a daily diary of trading patterns
                  he has observed. He said the diary is “priceless” because
                  price patterns occur much more frequently than most realize.
                  Regarding keeping a diary, Cook uses the adage: “If you don’t
                  know history, you’re doomed to repeat it.”
                  The following are Cook’s seven major rules for day trading:
                    DO NOT TRADE THE LAST HOUR OF THE DAY IN THE S&P 500 FUTURES
                    MARKET. The probabilities of a successful trade diminish in
                    this timeframe due to the impulsive and reckless buying and
                    selling by institutions just because they didn’t get their
                    trading done earlier, said Cook.
                    IF YOU DON’T LIKE THE TRADE YOU’RE HOLDING, GET OUT.
                    AFTER TWO HOURS OF TRADING, ASK YOURSELF: “DO I FEEL GOOD
                    ABOUT MY TRADING TODAY?” Once two hours have passed, Cook
                    says a day trader should have made at least two, or perhaps
                    more, trades, “but enough to reviewuate what you have done.”
                    If the trader feels good about the day’s trading, continue.
                    If not, stop trading that day.
                    ALL CYLINDERS OF THE ENGINE MUST BE RUNNING EFFICIENTLY.
                    “Day-trading is a job, and your paycheck is determined by
                    your ability. You can only maximize your ability if you have
                    all the information you need to make trading decisions. “If
                    a piece of equipment that one uses for trading is not
                    working, stop trading.
                    HAVE COMPLETE FAITH IN YOUR INDICATORS. “This is a must for
                    success,” said Cook. “Many times your indicators give you a
                    buy or sell signal, and you don’t follow it because you
                    don’t have the confidence the signal is right this time.
                    Successful day traders believe in their indicators, but also
                    are aware that nothing is 100% foolproof.”
                    TO ANYONE WHO ASPIRES TO BECOME A DAY TRADER, OBSERVE THOSE
                    WHO ARE SUCCESSFUL. “Any information you can procure on the
                    trading philosophies, mechanics and techniques is well worth
                    your while.”
                    DAY-TRADING IS A LONG-TERM COMMITMENT. “I fervently believe
                    it takes several years to become a true professional,” said
                    Cook.