All positions in TradeNow! are initiated in round lots of 1000 shares each. This requires a portfolio of roughly $200,000. It is also possible to trade in smaller lots of 100 shares each. In this case the size of the "smaller portfolio" should be a minimum of $20,000. This smaller portfolio is shown in TradeNow! daily and weekly bulletins in parenthesis, on the "Estimated Size Of Investment" line.

Terminology:

Buy Stop Order (Stop Price) - an order to buy a security at the Stop Price which is higher than the current market quote

Sell Stop Order (Stop Price) - an order to sell the stock short at the Stop Price which is below the current market quote

SPE (Starting Point Of Exit) - Initially defined as the Stop Loss Price which is subsequently updated in accordance with the "Floating Stop Loss Rule"

Pos. Open - Actual price at which the position was opened

Pos. Close - Actual price at which the position was closed

NT (Not Triggered) - The position was never opened due to the Target Stop Price never having been reached

Note: If a position wasn't closed the same day it was opened, each day it was held open is marked by the letter "o" in the "Position Close" column.

1. Rules used to initialize and stay in the position:

1.1. All positions are closed if SPE (Starting Point Of Exit) is reached ("Initial Exit Rule")

1.2. If the security opens higher than the Targeted Buy/Sell Stop Price, then the SPE should be updated proportionally ("Rule of Floating Stop Loss")

1.3. If the security opens more than 3 % or 1 point away from the defined Stop Price, a position is never initialized ("Rule of the Limit Price")- rule introduced on August 27, 1999

1.4. If the security moves in the desired direction more than 1/2 point, the new exit price becomes "SPE + 1/2" ("SPE+1/2 Rule")

1.5. After a new exit price is established, all subsequent exit points are updated at the same pace of 1/2 point (a half point move of the security triggers a half point move of the exit price)

1.6. A Position is never initialized during first 5 minutes of trading ("Rule of the night candle")

1.7. If the security with an SPE of "minus 1 point" moves in the desired direction more than 2 points, an actual Close Stop Order should be placed with your broker at the price equal to "Entry Point +1". If the security with an SPE of "minus 2 point" moves in the desired direction more than 4 points, an actual Close Stop Order should be placed with your broker at the price equal to "Entry Point +2". This Stop order acts in addition to all mental stops generated by "SPE + 1/2" rule ("Entry Point Plus Rule") - rule introduced on July 21, 2000

1.8. From the beginning of the session until 11 AM all exit points are disregarded except SPE ("11 O'Clock Rule")

1.9. All positions, regardless of their status, should be closed during the last 10 minutes of Friday's session

2. Exit Point Rules:

2.1. 5-minute Japanese Candlesticks are used to define a situation when the exit point has been crossed

2.2. The security is considered to cross an exit point when a 5-minute Japanese Candlestick closed BELOW (in case of a long position) or ABOVE (in case of a short position) the value of this exit point (see picture).

2.3. The 5-minute Japanese Candlestick rule is used with all points of exit EXCEPT SPE. SPE causes the position to be closed at its absolute value without waiting for a 5-minute candlestick to close above/below SPE. That's why we use mental stops for all points of exit and place an actual Close Stop Order exactly at the SPE value

2.4. All fluctuations WITHIN a 5-minute Japanese Candlestick are discarded so we are not forced to close a position