LIVE @W O R K B O O K

SUN TzU AND THE ART OF WAR FOR TRADERS

By Dean Lundell

COVERING: STOCKS, FUTURES, INDICES, OPTIONS, DAY TRADING,MONEY MANAGEMENT AND PSYCHOLOGY

Sun Tzu's classic treatise, The Art of War, has guided military tacticians to victoryfor more than 2,500 years. Dean will show you how to adapt the master's classic tothe art of investing, explaining how to think, plan, strategize, and execute to win.You will learn how to identify your role in the conflict, how to choose your bestweapons and develop a sound strategy, how to remove emotions from the picture,how to remain grounded in a volatile environment, when to fight, and when toretreat. Both novice and veteran traders can use Sun Tzu's timeless wisdom toconquer the market- even the US Marine Corps has studied the similarities betweenmilitary action and the daily battle of trading on the floor.

After his military tour of Vietnam, Dean Lundefl earned a business degree from theUniversity of Illinois. He launched his career as a retail account executive in 1976with Chicago's Merrill Lynch, Pierce, Fenner & Smith. He soon moved to thefixed-income desk at Merrill Lynch Capital Markets, serving as a vice president ofthe firm from 1983 to 1989. For the next three years, Dean served as a principal atCrestar Investment Bank in Virginia. In 1993, he returned to Chicago to establishhis own trading firm, Osiris Trading, Ltd., where he is both Managing Director andCommodity Trading Advisor. Dean is also associated with Greenwich Associatesof Connecticut, and is a member of the National Futures Association and TreasuryManagement Association.

Dean is the author of Sun Tzus Art of War for Traders and Investors(McGraw-Hill, 1997), Sun Tzu's Art of War for Savvy Investors, and The InvestorsWeb Guide. He has written several feature articles for Futures magazine, andtaught college-level classes on financial markets.

Mr. Lundell's Personal Workshop was presented andrecorded at a recent LIVE @ TAG conference.

Copyright Dean Lundell / INO.comAll Rights Reserved

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Who is Sun Tzu ?

Sixth Century Chinese General-Philosopher

What is The Art of War ?

A Compilation of Thirteen Lessons

Managing Conflicts and Contests

Why Should I Care ?Required reading at Military AcademiesWidelyfollowed in the Business CommunityGuidefor managing Risk and Expectations,Adversaries and Yburself

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Win - Without Having to FightAny successful engagement is a four-step process:

Strategic AppraisalThe Focal Point that Everything Revolves Around

Development of a Tactical PlanExploiting Opportunities

The Means to Prosecute the PlanChoice of Weapons

Acknowledgement of Victory or DefeatExit Strateqy

Strategy in Terms of the Market:

· What is your Strategic Assessment of the Market ?Relative to Other Similar or CompetingMarkets?

· Do the Fundamentals Support the Strategic Assessment?The Self Diagnostic

· Technical Analysis the Timing of AttackWhen to Attack Weak Opponents

· Pragmatic Considerations

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Managing Event Risk

Strategy in Terms of the Trader:

What is Your Plan of Attack?Anticipating Market Reaction

What Vehicles to use to Exploit Opportunity?Best Use of Capital vs Expectations

What Weapons will You Use?Technical Analysis Tools

What is Your Exit Strategy?Identifying Target Areas

Common Themes in The Art of War - for Traders

Adaptability - Flexibility - VersatilityMarkets are Dynamic - Not Static

Planning and PreparationManaging Risk and Expectations

ComparisonsNothing Happens in a Vacuum

Method and DisciplineStick to Your Plan

Stratagem - Positioning Yourself to Win

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ThinkingAheadCommitment to VictoryFocus and Purpose

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Change Your Perspective· Strategic AppraisalUnderstand the Big PictureThink Globally

· ConflictKeep Your Mental EdgeVictory is Important - Not Persistence

· Planning AttackDefine Your Own RoleUse Superior Positioning

· Tactical ConsiderationsRemain Grounded in Volatile Environment

Imagine Victory Clearly - Pull the Trigger

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· Effectiveness

Seize Opportunities - Don't Over AnalyzeExploit Weak Opponents

· Fragility and Ability

Identify When to Attack - "en to RetreatTrade from Strength - not Weakness

· Maneuvering

All Warfare is Based on DeceptionAfaster Strength - Don't Trade Scared

· Versatility

Wise Generals are VersatileConsider both Benefit and Harm

· Stratagem

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Anticipation - not ReactionThink in Terms of Probabilities Not Opinions

· TerrainRecognize your Market EnvironmentRecognize your own Mentality

· CircumstancesDo Battle only when it's to Your AdvantageGather in Plunder

· Fire AttackWho is Starting Fires ?Stay Downwind

· Collecting Intelligence

Create Your Network Share Information and Methods

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Trading Rules: Do's

· Trade to Make Money - Not for Fun and Gaines

· Concentrate in One Pit or Class

·Learn Quirks of Other Traders and Brokers

· When Initiating a Trade - always get the Edge Buythe Bid - Sell the Offer

· When Liquidating a Bad Trade - give up the Edge

Hit the Bid - Take the Offer

· A Scratch Trade is a Winner

· Make One Tick on a Million Trades

Not a Million Ticks on One

· Learn from Others Traders Mistakes

· DISCIPLINE - DISCIPLINE - DISCIPLINE

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Trading Rules: Don'ts

· Do Not be a Tradaholic

· Never add to a Bad trade

Once you have a Profit - Never let it Becomea Loss

· Don't be a One-Way Trader - Be Flexible

· Never Leave the Pit - or Your Desk

· Three Losing Trades in a Row Rule

· NO HOPING - NO WISHING

. NO PRAYING - NO OPINIONS

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Dean Lundell

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