1. Market Psychology Market Plan Types of Orders

2. Discipline The key to successful marketing Having a plan and having the courage to follow the plan Understanding market psychology can help bring discipline

3. The Herd Complex Supply or Demand Shock hits market Major hedgers & Speculators take position before the market even moves Market starts to move and active hedgers and speculators get in and drive the market higher/lower Infrequent traders see big move and don’t want to miss out. Jump in and move the marker higher/lower Some hedgers panic and offset; New speculators jump in late; last surge for the market

4. The Herd Complex Market is now over bought or over sold Large traders get out. Take their profit Market turns around and late entrants lose money Market settles at a position below top or above bottom Dead cat bounce

5. Aids to Discipline Price Open Interest Volume Market Direction RisingRisingRisingBullish RisingFallingFalling Turning Bearish FallingRisingRisingBearish FallingFallingFalling Turning Bullish

6. Position of Traders Watch the Positions of the Large traders Don’t want to cross them very often Large Commercials Large Speculators Small Traders

7. Overall Philosophy Ride your winners Cut your lossers Don’t be stubborn about your market position It is hard to fight the market

8. Marketing Plan Marketing versus Selling Separate pricing and delivery decisions Know information Fundamentals Fundamentals Price patterns (seasonal, cyclical) Price patterns (seasonal, cyclical) Technical Analysis Technical Analysis Create an informed price range

9. 6 Marketing Questions When to Price Where to Price What form, grade or Quality What services to use How to Price When and How to Deliver

10. Types of Orders Market Order – Sell at the Market Adv. Always filled Adv. Always filled Disadv. Don’t know what price it will be filled Disadv. Don’t know what price it will be filled Limit Price Order – Specify Price Adv. Know price that order will be filled at Adv. Know price that order will be filled at Disadv. Order may never be filled Disadv. Order may never be filled Sell Stop Order – Sell at Price if touched from above Adv. Place protection below an uptrend Adv. Place protection below an uptrend Disadv. Could be filled below order in a volatile market Disadv. Could be filled below order in a volatile market Sell Stop Close Only – Must close below price