David Nassar writes a pretty good beginners guide to electronic day trading.  Obviously a smart investor, Mr. Nassar decided to make a few extra coins by writing a book on the subject.  

From a technical standpoint, if you never day trade its good to know what goes through the daytraders mind.  Nassar constantly uses fighter pilot analogies.  Day trading can be just like it.  Some traders hold stocks for minutes, very happy with gains of 1/2 a point or less.

The book gives a solid foundation on how the NYSE and NASDAQ actually trade stocks.  This is important for any investor when deciding which kind of order to use, market or limit.  He gives insight into how the large investment companies used to take advantage of the retail investor and shows the brave how to out fox them.

His chapter on what market indicators to look at when deciding which way the market was moving is priceless.  We took several ideas out of this book and used it to improve our market monitor.

The analysis of stock price patterns was on target although a little enthusiastic.  Take a look at his graph on sonic booms and compare it to any internet stock.  It even works with charts for Dell Computer.

His chapter on detecting the intentions of large market makers is priceless.  How does Goldman Sachs fill a 1,000,000 share order for a mutual fund without the news getting out.  The answer to that question is in the book.

Mr. Nassar does not believe people should day trade without the proper tools.  He recommends a reliable system that includes on line real time quotes and NASDAQ Level II quotes.  He notes that several software vendors are working on products that will allow you to pre load all your trade parameters into the software and have it execute.  For example, if you want to buy Dell at $41, sell it at $41 1/2 and will only tolerate a loss of 1/4 point, you can do so.  The same thing could be done on a short sale transaction.

Mr. Nassar makes it clear that in order to be a successful trader you need discipline and you must accept losses. Nobody can be right 100% of the time.  He also recommends that people take a course in this type of trading prior to doing it for real.  Any course should include training time on a simulator that can be made live when you are ready.  Why spend time on a simulator and then have to learn the interface over when you do the real thing?

Another good piece of advice is to shop around for software you are comfortable with.  You need to know your user interface cold before you try a single trade.  He recommends a separate phone line for the computer and a backup to your Internet ISP so you can close your trades in the event of a service disruption.

Mr. Nassar tells you what he thinks of stock tips.  They are in general worthless.  He does go over some of the standard plays that apply to even casual traders.  Earnings and split plays are handled in detail with some good insight into the psychology of the market.  His advice to go against the herd mentality will work for any investor.  Probably the worst day to buy a stock is the day after they announce earnings.  Many stocks gap up as specialists and market makers push up the price in anticipation of strong demand.  Then the stock starts to fade.  By this time the big investment houses have already unloaded their shares on the public.  They are waiting for the dip to get back in at a reasonable price.

Not everyone is made out to be a day trader.  As someone who tried it without the proper tools I can tell you it is very stressful, and I don't do it any more.  I make more money buying and holding.  If day trading is a possible career option for you, this book is a must have.

Shmuel Protter
ISN Stockwatch

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