The Four Legged Stool

We each have our own handwriting. Think on this statement, as it defines the uniqueness in who we are, and in how we trade. As a trainer I teach FOCUS first, and thought you might gain as traders from the logic in which I approach a trade, or a business, or life.

The Four Legged Stool Concept

It has been proven that the human mind can only truly handle 5 large projects or situations at a time. Multi-tasking may “sound good,” but does not really happen. We end up doing some things without completing them, while doing other jobs without complete thinking. As speed takes over our universe, and we have “instantaneous communication it’s our natural tendency to begin to “overload,” or to hit our threshold.

To develop a business, a plan, or a project, it is always best to organize the effort. Most companies fail here because they have so many people multi tasking that it is impossible to sit down, prioritize, and then execute.

We fail at the execution.

To organize that effort I work at a consultant teaching organizations to focus on no more than 5 core objectives at one time. Each objective has a “seat,” or a core issue, shown in the 4- legged stool pictured below. This “seat” is defined as the WHAT (what must be done, what the issue is, what opportunity is being considered) and 4 legs hold up that seat, or the core issue.

One by one, we replace, bolster or rebuild four legs of a stool. We assign people to the tasks associated with the issues for each seat of the stool. You can build the four legs at one time, just not too fast on any one leg, and with projects that work in harmony. Or, some smart organizations may do the “research leg” before they even consider building a 4 legged stool.

Think of it as having rungs up a ladder, or multiple chair rails to build from the bottom of each stool leg to get to the top. You may not have to work on four legs at the same time, but the goal is strong support (the legs) for the concept (the seat)’.

This is a simple drawing that simply says:

-Identify (the seat)

-Define the issues and the how to’s (the legs)

It’s thinking this simply that can allow the complexity of a project to be completed perfectly. And, that project can be YOU, or YOU trading.



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The first nine trading days of August are historically weak. Interesting, they certainly have not been this time. Yesterday we saw the first real move to the downside, with the Theoretical Dow hitting 9166 before noon.

We re-calculated the Dow by 10.30 a.m. and had a pivot of 9250.61. For much of the day, despite downside, the market then struggled at or around the pivot point.

IMPORTANT NOTE: WE ARE UPDATING OUR DOW OR OEX PIT PIVOT Calculators in both Level 2 and Level 3 over the next few days, and you'll note we are providing an Intraday calculator that lists Open/High//Low/Close.

These are all calculations you take from the current day's Dow, and the close is defined as the "last" price of the Dow, or the OEX.

The market yesterday showed the fear and the greed in the market. Many chartists see a high at 9500 and up, and others sit back dumbfounded the trading range (The # of days a bias typically continues) has extended moving averages.

Watching the market at up until 2.30 p.m., before whatever "action" begins puts had gained considerable ground. We saw a market move from a pivot to r1 and s1.

Yesterday's instructions on the call again noted the high risk, but reports came in from many subscribers that traded again for profit. We said: -OXBHM OEX.X AUG 2009 465.0000 CALL
"I feel like a record. Watch futures, is up over 50 points, be ready to "pay to market" at open and try to sell by day end for 30% profits.

If futures are only moderately down, and you remain open to high risk, take a best buy trade on the signal at no higher than prior day close, 20% under best buy, and sell for 30% to 54%.

Calls increase in risk in second buys, and are "beyond bell curve analysis."

"Floyd, I still saw the hesitancy so waited for best buy on the call today and got it at 7.40 during the morning downturn, and sold when it hit R1 for 8.90. Wow, nice signal"-NBW, Kansas City

Yet again, at 3 pm. the market had upside swung to only a 24 point loss for the day.

So, here we are: we hold a put to the hedge, and are making money on calls daily, and some of us are seeing this as too high risk at this point, and are actually afraid to buy to the trend again.

That's what the market feels, coupled with this high frequency computer trading info I've been forwarding. The boys on Wall Street are up to something again, and I already know there are games, and even the conspiracist in me doesn't believe it's the government, but Wall Street back in action.