The Close

There are three distinct trading periods during the day. They are the Open, Midday, and the Close. You must make
adjustments for each time period. The Open is the easiest period of time to trade, followed by the Close. Here are some
suggestions and adjustments that I make for the Close:

1) Lower my Tier size. I am less confident about my trades into the Close as I am on the Open. Thus, I risk less by lowering
my Tier size. I want most of my volume to be done during the period where I feel most comfortable and confident. Lowering
my Tier size into the close ensures most of my volume will be done during the Open.

2) Do not fight the momentum into the Close. I am a fade trader. When I conclude a stock is overbought, I get short. When I
conclude a stock is oversold, I get long. My style is less effective when there are unusually large orders. For example, a
stock that I short into a quick upmove does not pullback or pullsback very little and then makes a new high, when there are
huge unusual orders. I am careful into the Close to make certain that I spot these huge, unusual orders. Another adjustment
I make is not to fade moves as much as I do on the Open and/or give my stocks extra room to move before fading. I fade
when I see a great opportunity and not just a good or very good one. I am cognizant that my style needs adjusting during the
Close.

3) Be aware that these huge, unusual orders may appear. Institutional orders tend to be filled in the last hour of trading. So
make sure not to get caught on the wrong side of one of these huge, unusual orders.

4) This is the second hardest time of the day to trade. Therefore, I lower my Tier size, keep my losses tight, try and patiently
wait for great risk to reward setups as opposed to good or very good ones, and take my profits more quickly. I trade lighter,
expect less and limit my losses. I make adjustments to my trading into the Close.

5) Gathering information concerning the strength of a stock and identifying important prices and levels is often your most
important task into the Close. You may use those important prices (prices where there were huge battles, intraday support
and resistance, and huge volume) to make money the next day on the Open. After gathering such important information, you
may trade with a long bias the next few days in a stock because you recognized its strength into the Close. When you
discover important prices and levels in a stock into a Close, set alerts for these levels and trade off of them. They will give
you an advantage, an edge.
6) Know which stocks are to report after the Close. Check www.briefing.com before the Close for those that are to report. If
RIMM is going to report after the Close, be careful trading it during the last hour. It may trade choppy, with crazy moves, as
traders position themselves before the reporting.

7) Prepare a plan during the Midday for the Close. Which stocks will you trade? And what prices will attract your attention in
those stocks? Where will you get long or short in certain stocks? What are you looking for to get long or short in a stock? It is
much easier to just execute on a preconceived plan met with confirmation on your trading screen, than to try and develop a
plan while the stocks are moving into the Close.
8) Identify the huge unusual orders into the Close. A huge unusual buy order can look like this: HANS makes a sharp
upmove from 30 to 30.65. You expect it to pull back to 30.25, yet the bid barely drops after the upmove. You recognize that
the bid is very close to the offer and not really dropping even after a strong upmove. And then not only does that stock not
trade down much but it makes a new high and trades well above 30.65. The stock not pulling back much when it normally
would have was our sign that a huge, unusual order may be present.

9) Experiment with on the Close imbalances. You may notice that VLO has 350,000 more to buy on the Close. This may
cause your stock to trade higher before the Close. Ask Josh how to find this information. These plays do not work that well
anymore. But they do work at times. And you should know about them.

10) Be aware of the time during the last hour of trading. The specialist does not have to fill your order very close to the
Close. And you do not want to go out with a stock. So make sure you are flat before the end of the trading day.