Freedom Trader Intensive Pre-­­Study Guide

with Courtney Smith, Master Trader

Freedom Trader Intensive

March 22nd & 23 Sydney

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Dear Student,

It’s my pleasure to be your instructor for the upcoming Freedom Trader Intensive that you have registered for.

We have created this Pre-­­Study Guide for you to complete in advance of the course so that you will be able to have the ultimate experience during your time with me. It is important for you to learn and complete these basics before you attend your course. I’ve got lots of great information to share with you, and we will dive right in to the techniques and terminology on Saturday morning. I want you to be prepared for the ride!

In addition to this Pre-­­Study Guide, we have arranged another great BONUS for you! You can find access details on how to watch a “Newbie” Webinar on Page 11 of this Guide. How cool is that? I want to make sure you watch this important Webinar prior to attending your course.

In addition to what we have provided you in advance of your course, we’ll have more great surprises in store for you after your course.

I am committed to your success. My goal is for you to be able to go home and trade on Monday!

Happy Trading!

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STEP ONE:

Please review the following terms. You will then be asked to complete the fill-­‐in-­‐the-­‐blank test on the following pages.

1) What is a Stock: A stock is a type of security that signifies ownership in a corporation or company.

Stocks are also known as "shares" or "equity.” Stocks are the foundation of nearly every portfolio.

There are two main types of stock: common and preferred. We deal mainly in common stock.

Owning stock gives the owner certain rights and privileges. Theoretically, since we own stock in a

company, we would get to vote for the board of directors who then choose the CEO. In real life we

are probably not going to own enough of a stock to have any voice in how the company is run or to

have any say in company policy. We would need at least 5% of the company and 5% of the shares of

a company that has millions of shares outstanding. That would be a huge amount of shares.

Some stocks pay dividends, which are paid on a monthly or quarterly basis. Buying dividend stocks is

one of Courtney’s strategies that can be a real money maker.

A holder of stock (a shareholder) has a claim to a part of the corporation's assets and earnings. In

other words, a shareholder is a partial owner of a company. Ownership is determined by the

number of shares a person owns relative to the number of outstanding shares.

EXAMPLE: A company has 1,000 shares of stock outstanding and you own 100 shares, you would

own and have claim to 10% of the company's assets. Stocks are the foundation of nearly every

portfolio.

2) Buying a Share of Stock: This means that you are buying one Share of a particular company. It is also

known as buying “Equity” in a company. Shares represent the portion of the company that you own.

The more of a company’s stock that you buy, the more of the company you own.

3) How can we make money with Stocks: There are two different ways to make money with stocks. a) Capital Appreciation – I buy shares and then the price of the shares goes up.

Later I can sell the shares for more than I paid. The difference between what I paid

and what I sold them for is my profit.

b) Dividends – Some companies pay dividends. They will send you a monthly or

quarterly check based on their profits, divided amongst all the shareholders.

EXAMPLE: A company makes a million dollars profit and decides to pay out 50% as dividends. There are a million shares outstanding. If you own 1000 shares you are entitled to .50 per share, or

$500.00 paid as dividends.

4) Securities: A financial instrument that represents an ownership position in a publicly traded

corporation (stock) or a creditor relationship with a governmental body commonly known as

government debt, such as a 10 year note. It could also be a corporate bond or option. A security is a

tangible, negotiable financial instrument that represents some type of financial value. In other

words, it is an instrument of value that can be traded. That is where we as traders come into the

picture. If something is tradable, we will trade it.

5) Position Size: The number of shares of stock you have entered in an order to buy with your broker,

or the number of shares you currently own. Position size is a very key and important part of Risk

Management. In trading, size matters. If you have a large position, and it goes against you, a lot of

money can be lost.

6) Risk Management: Another name for ASSET ALLOCATION, or how much of your trading account equity you risk on a trade. If you risk 50% of your account equity and you lose two trades in a row,

you will be done trading. Risk Management is one of the most important components of stock

investing. We will be teaching you how to calculate your position size to minimize your risk.

7) Psychology of Trading: Your trading mindset. By controlling your emotions and keeping a proper frame of mind you will be able to follow the rules of a system and you will become a better trader.

8) Ticker Symbol: A group of characters (usually letters) representing a particular security listed on an

exchange or otherwise traded publicly. Every listed security has a unique ticker symbol assigned.

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When a company issues securities to the public marketplace, it selects an available ticker symbol for

its securities which investors use to place trade orders. Stock symbols are the most recognized type

of ticker symbol. Stocks listed and traded on U.S. exchanges such as the NYSE have symbols with up

to three letters. eg. KO, IBM. Nasdaq-­‐listed stocks have four-­‐letter symbols. eg. AAPL, GOOG

9) When someone asks, what do you trade? You say I trade “stocks” or I trade “ equities.” They mean

the same thing and they are interchangeable.

10) When we say AAPL (Apple) costs $660.00: It means that it costs you $660.00 of your Trading

Account Equity to buy 1 share of AAPL. This will be true of any stock that you buy; the price on your

trading software charts is the price of one share of that particular stock.

11) The Stock Market: A system of electronic and floor buying and selling of stocks, which is organized

by stock exchanges and trades with regular hours that have been established by the exchanges. We

often refer to it as “The Market”.

12) New York Stock Exchange: The New York Stock Exchange (NYSE) is the largest stock exchange in the

world. The average daily trading volume is $153 billion. Founded in 1817, it has over 2,000 stocks

listed on the exchange. Formerly run as a private organization, the NYSE became a public entity in

2005. Also known as the "Big Board," the NYSE relied for many years on floor trading only, using the

open outcry system. Today, more than half of all NYSE trades are transmitted electronically,

although floor traders are still used to set pricing and deal in high volume institutional trading.

13) NASDAQ: An acronym for National Association of Securities Dealers Automated Quotation. The

acronym is no longer used and Nasdaq is now a proper noun. The Nasdaq is a computerized system

that facilitates trading and provides price quotations on more than 5,000 of the more actively traded

over the counter stocks. Created in 1971, the Nasdaq was the world's first all electronic stock

market. Stocks on the Nasdaq are traditionally listed under four or five letter ticker symbols. If the

company is a transfer from the New York Stock Exchange, the symbol may be comprised of three

letters. The Nasdaq is traditionally home to many high-­‐tech stocks and this is where you will find

Microsoft, Intel, Dell and Cisco.

14) S&P 500: The S & P 500 (Standard & Poor’s) is a stock market index based on the stock prices of the

top 500 publicly traded American companies. It is the most important index to watch, as it

represents the majority of industries in the U.S. The S&P 500 is one of the most commonly used

benchmarks for the overall U.S. stock market. The Dow Jones Industrial Average (DJIA) was at one

time the most renowned index for U.S. stocks, but because the DJIA contains only 30 companies,

most people agree that the S&P 500 is a better representation of the U.S. market. In fact, many

consider it to be the definition of the market.

15) DOW JONES: The Dow Jones Industrial Average or the “DOW” as it is commonly known, is an index

of 30 large publicly owned companies, chosen by a committee. The value of the Dow is not the

actual average of the prices of its component stocks, but rather the sum of the component prices

divided by a divisor. The newest component of the Dow is United Healthcare. In September 2012, it

replaced Kraft Foods. The oldest company in the Dow is General Electric, which has been in this

group since 1907. The components of the Dow have changed only 48 times in 116 years. The Dow

Jones Industrial Average (DJIA) is one of the oldest and single most watched indexes in the world.

The DJIA includes companies like General Electric, Disney, Exxon and Microsoft. When the TV

networks say "the market is up today," they are generally referring to the Dow.

16) Mutual Fund: A professionally managed investment vehicle that pools money from many investors,

then invests the money in securities, which theoretically gain in value. Mutual Funds can be sold to

retail investors and anyone in the public. When using Courtney Smith’s methods, we do not trade

mutual funds. In fact, the way that Mutual Funds are traded in real life is almost the exact opposite

of the methods that Courtney teaches.

17) Hedge Fund: Also a professionally managed investment vehicle that pools money from many

investors to invest in securities, which again, theoretically gain in value. Hedge Funds can trade in a

wider variety of instruments than mutual funds; however they are usually only open to a certain

level of accredited/experienced investor.

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18) Exchange Traded Fund (ETF): A security that tracks an index, a commodity or a basket of assets like

an index fund, but trades like a stock on an exchange. By owning an ETF, you get the diversification

of an index fund as well as the ability to sell short, buy on margin, and purchase as little as one

share. Another advantage is that the expense ratios for most ETFs are lower than those of the

average mutual fund. When buying and selling ETFs, you have to pay the same commission to your

broker that you'd pay on any regular order. One of the most widely known ETFs is called the Spider

(SPDR), which tracks the S&P 500 index and trades under the symbol SPY.

19) Initial Public Offering (IPO): The first sale of stock by a private company offering its stock to the

public. Also known as “going public” or a “public offering” or in England as “floating the company.”

IPOs are often issued by smaller, younger companies seeking the capital to expand, but can also be

done by large privately owned companies looking to become publicly traded. In an IPO, the issuer

obtains the assistance of an underwriting firm such as a large bank like Morgan Stanley. The

underwriter helps it determine what type of security/stock to issue (common or preferred), the best

offering price and the time to bring it to market.

20) Bull Market: A financial market in which prices are rising or are expected to rise (going up). The term

"bull market" is most often used to refer to the stock market, but can be applied to anything that is

traded, such as bonds, currencies and commodities. Bull markets are characterized by optimism,

investor confidence and expectations that strong results will continue.

The use of "bull" and "bear" to describe markets comes from the way the animals attack their

opponents. A bull thrusts its horns UP into the air, while a bear swipes its paws DOWN. If the trend

is up, it's a bull market. If the trend is down, it’s a bear market.

21) Bear Market: A market condition in which the prices of securities are falling (going down) or are

expected to fall. Although figures can vary, a general rule is that a downturn of 20% or more in

broad market indexes such as the Dow Jones Industrial Average (DJIA) or the S& P 500 Index, over at

least a two-­‐month period, is considered an entry into a bear market. A bear market is not the same

as a correction of a Bull Market. A correction is seen with less than a 20% down move which usually

lasts less than two months. So, a Bear Market lasts longer than 2 months and is at least a 20% fall. A

good example of a Bear market took place in the second half of 2008 lasting until March of 2009.

22) Long: The term we use when we are buying a stock or security because the price is going UP. Also

known as “Bullish.” We say we are bullish on the stock, because we believe the price is moving

upwards or is expected to move upwards. It can also be used as trader slang for something that they

like. EXAMPLE: I am Bullish on Italian sports cars.

23) Short: The term we use when we are selling a stock or security because the price is going DOWN.

Also known as “Bearish.” We say we are bearish on the stock, because we believe the price is

moving downwards or is expected to move downwards. We will not discuss going short on a stock

during our course, but just know that it is the opposite of going long.

24) Diversification: A risk management technique that mixes a wide variety of investments within a

portfolio. A portfolio with a wide range of different kinds of investments will, on average, yield

higher returns and pose a lower risk than any single investment found within a portfolio.

Diversification strives to smooth out risk events in a portfolio so that the positive performance of

some investments will neutralize the negative performance of others, a type of hedging if you will.

Therefore, the benefits of diversification will only be seen if the securities in the portfolio are not

highly correlated, that is, they are not invested in close or similar types of companies or sectors.

25) Portfolio: A grouping of financial assets you currently hold within your brokerage account, such as

stocks, bonds and cash equivalents, or even precious metals. Mutual funds, exchange-­‐traded funds

and hedge funds can also be a part of a portfolio.

26) Brokerage Account: An arrangement between an investor (such as yourself) and a licensed

brokerage firm that allows the investor to deposit funds with the firm and place investment orders

through the brokerage. These orders are then carried out on the investor's behalf. The investor

owns the assets contained in the brokerage account and must usually claim as income any capital

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gains he or she incurs from the account.

There are three main types of brokerage accounts:

a) Cash Account: In a Cash account, if you invest $10,000 into your trading account, you can

place trades until the $10,000 is fully invested. You must have enough money in the

account to cover the trades that you place.

b) Directed Account: Directed accounts are accounts in which a broker or investment advisor

is authorized to make trades for you. The broker can buy and sell securities on your behalf at

will, but you are responsible for paying all taxes and commission costs. Use extreme caution

with this type of account.

c) Margin Account: A Margin account allows you to trade securities with money borrowed

from the broker. There is a maximum level of 50% margin on equities imposed by the Federal

Reserve Bank, and most brokerage houses have tighter restrictions than 50%. Should the value

of the securities purchased on margin decline below this percentage, you will get a “margin call.”

A margin call requires you to either put more money in your margin account or sell some of the

assets you have purchased on margin to reduce the amount of money you owe.

27) Order: An Order is an instruction from the client (you) to your broker, electronically or verbally to

buy or sell a stock, bond or other financial security. There are lots of order types, but we are only

going to use and discuss two types during our course.

a) Stop Loss Entry Order: This is an order to create an "At Market Price" order when

the market reaches a SPECIFIC price that YOU specify. Use it when you want to enter

the market at a different price than the current price (higher price if buying, lower price

if selling). This is the type of order entry WE use in Courtney’s system.

b) Stop Loss Exit Order: This type of an order tells the broker to convert the Stop

Loss Exit into a “At Market Price”order when a specified price is touched. The Stop

Loss Exit Order will protect you from losing more on a trade than you are prepared

to. It is a form of risk management that we always use.

EXAMPLE: You place an order to buy 1 share of AAPL stock at the market price of $700.00. At the

same time, you also place a stop loss order to sell 1 share of AAPL at $650.00. If the price of AAPL

goes from $700.00 down to $650.00, your broker will sell the one share you have when the price of

AAPL drops to $650.00. You will lose $50 in this example. But you have set an automatic protection

to lose only a small amount, which protects your portfolio value against a huge loss. We never trade

without Stop Loss Exit Orders.

28) Stopped Out: Means that the stock price has gone against you (moved in the opposite direction of

what you expected it to do) and triggered your Stop Loss Exit Order, which got you OUT of the trade.

29) Stopped In: Means that the stock price has moved in your favor (moved in the direction of what you

expected it to do) and has triggered your Stop Loss Entry order and got you INTO the trade.

30) Entered Order vs. Executed Order: An Entered Order is simply a request by you to the Broker to

place an order on your behalf. You enter your order on the broker’s website, or by calling in an

order. The order is not “Executed” or “Filled” until the market reaches the conditions that you have

specified to place your order.

EXAMPLE: You place a Stop Loss Entry Order to purchase AAPL at $752.00. It is currently at $750.00.

You have “Entered” an order. Your order does not get “Executed” or “Filled” until the price of AAPL

raises to $752.00, at which time your Stop Loss Entry Order is converted into an ”At Market Price”

order which will get you into the trade.

31) Commissions: The price you are charged by your brokerage firm for every order that is Executed or

Filled. You are not charged when you “Enter” a trade, only when the trade is actually “Executed” or

“Filled.” Look for a brokerage firm that will charge you a $7 or less commission per trade.

32) Technical Analysis: The process of looking at past price action to forecast/determine future price

action. It is a study of graphs or charts that tells you WHEN to buy. Technical analysis is a method of

evaluating securities by analyzing statistics generated by market activity, such as past prices and

volume. Technical analysis does not attempt to measure a security's fundamental value, but instead

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use scharts and other tools to identify patterns that can suggest future activity. It is a study of past

price movements and the patterns of those movements that are used to tell you WHEN to buy.

33) Fundamental Analysis: The process of evaluating stocks by attempting to measure the real value of

the stock based on the current situation of the company. This type of analysis tells you WHAT to

buy. Fundamental analysis is a method of evaluating a security that entails attempting to measure

its fundamental or existing value by examining related economic, financial and other qualitative and

quantitative factors. Fundamental analysts attempt to study everything that can affect the security's

value, including macroeconomic factors (like the overall economy and industry conditions) and

company-­‐specific factors (like financial condition and management). The end goal of fundamental

analysis is to set a value on the security that an investor can compare with the security's current

price. This value can then be compared to the current value and a decision can be made if the

security would be a wise investment. The real aim is figuring out what sort of position to take with

that security (underpriced = buy or go long, overpriced = sell or short). It is a study of a series of

economic factors used to tell you WHAT to buy.

34) Charts: We are going to be showing you a Software Program we use that contains price bars (on

stock charts) showing price movement of a particular stock or security for different time periods.

These time periods can be Daily, Weekly, or Monthly. The name of this Software Platform is PRO

REAL TIME.

35) Price Bars: These are the Bars representing price movement that you will see on a stock chart. There

are four components of each Bar.

OPEN: the price of the stock when the trading session opens for the day:

HIGH: the highest price the stock touched during the trading session of the day

LOW: the lowest price the stock touched during the trading session of the day

CLOSE: the price the stock is at when the trading session closes for the day.

If we are looking at a Weekly Chart, we would take out “Day” and insert “Week” in the Open, High,

Low, Close descriptions above.

36) Support: The price or price range where historically over time, the stock price has difficulty falling

BELOW. This is the price where a LOT of Buyers tend to enter the stock market (buy). The support

level is more difficult to break through the more often it is approached but not broken through.

However when it is broken through it can result in a strong move. Support can become Resistance.

37) Resistance: The price or price range where historically over time, the stock price has difficulty rising ABOVE. This is the price where a LOT of Sellers tend to exit the stock market (sell). The resistance

level is more difficult to break through the more times it is approached but not broken through. As

with Support, if it is broken through it can result in a strong move. Resistance can become Support.

38) Trade Journal: A dedicated record of all of your Trades, Trading Ideas, Trading Plans and Trading

Psychology that you complete on a DAILY basis. A complete record of all your trading. This record

will be useful later for Post Mortem (follow-­‐up analysis and review to look at your trade execution)

and determining what type of trades worked well and those that did not.

39) Trade Plan: We want to have a specific plan for each trade. What is the basis for the trade? What

could go wrong with the trade and why? What is the Fundamental and Technical analysis that is

telling us what we should buy and when we should buy? What is the Entry, Stop, and Position size?

We always want to have a plan and trade the plan.

40) Investors.com, Yahoo Finance.com: Take some time to go to these sites now and look at them over

so that they are familiar to you. We will be using these sites on a regular basis, and they will be a big

part of your Fundamental Analysis procedure. We will be covering these sites more in depth during

your course.

41) IBD 50: Part of the Investors.com website where we start the process of looking for the Best of the

Best Stocks. Also referred to as “BOB.” We will cover this in depth during the course.

42) Execute FLAWLESSLY!: One of Courtney’s favorite phrases! To do this we must have the proper

PSYCHOLOGY, RISK MANAGEMENT, and PROVEN TECHNIQUES THAT WORK WHEN YOU FOLLOW

THE RULES. All of these are the foundation of what you will learn during your course

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STEP TWO:

Verify your knowledge level of the following terms by filling in the blanks provided:

1) What is a Stock: A stock is a type of that signifies ownership in a corporation or

company. Stocks are also known as " " or " .” Stocks are the

of nearly every portfolio.

2) Buying a share of stock: This means that you are buying one of a particular company. It is

also known as buying “ ” in a company. Shares represent the portion of the company that

you own.

3) How can we make money with stocks: There are different ways to make money with stocks.

a) – I buy shares and then the price of the shares

goes up. Later I can sell the shares for more than I paid. The difference between what

I paid and what I sold them for is my profit.

b) – Some companies pay dividends. They will send you a

monthly or quarterly check based on their profits, divided amongst shareholders.

4) Securities: A financial instrument that represents an position in a publicly traded

corporation (stock) or a creditor relationship with a governmental body commonly known as

government debt, such as a 10 year note. It could also be a corporate or an

. A security is a tangible, negotiable financial instrument that represents some type of

financial value.

5) Position Size: The of stock you have in an order to buy

with your broker, or the number of shares you currently .

6) Risk Management: Another name for , or how much of your trading

account equity you risk on a trade. Risk Management is one of the most important components

of stock investing.

7) Psychology of Trading: Your trading . By controlling your and keeping a

proper frame of mind you will be able to follow the rules of a and you will become a

better trader.

8) Ticker Symbol: A group of characters (usually ) representing a particular security listed on

an exchange or otherwise traded publicly. Every listed security has a ticker symbol assigned.

symbols are the most recognized type of ticker symbol.

9) When someone asks, what do you trade? You say I trade “ “, or I trade “ “ . They

mean the same thing.

10) When we say AAPL cost $660: It means that it costs you $660.00 of your Trading Account

to buy 1 of AAPL.

11) The Stock Market: A system of and buying and selling of stocks, which is

organized by stock exchanges and trades with regular hours that have been established by the

exchanges. We often refer to it as “ ”.

12) NYSE: The New York Stock Exchange is the stock exchange in the world. The average daily

trading volume is $153 billion. Founded in 1817, it has over stocks listed on the exchange.

13) NASDAQ: An acronym for National Association of Securities Dealers Automated Quotation. The

Nasdaq is a system that facilitates trading and provides price quotations on more

than 5,000 of the more actively traded over the counter stocks. Created in 1971, the Nasdaq was the

world's first all stock market.

14) S&P 500: The S & P 500 ( & ) is a stock market index based on the stock prices of

the top publicly traded American companies. It is the most index to watch, as it

represents the majority of industries in the U.S.

15) DOW JONES: The Dow Jones Industrial Average or the “ “ as it is commonly known, is an

of 30 large publicly owned companies, chosen by a committee. The value of the Dow is not the actual

average of the prices of its component stocks, but rather the sum of the component prices divided by

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a divisor. The Dow Jones Industrial Average (DJIA) is one of the and single most watched

indexes in the world.

16) Mutual Fund: A professionally managed investment vehicle that money from many

investors, then invests the money in . When using Courtney Smith’s methods, we

trade mutual funds.

17) Hedge Fund: Also a professionally managed investment vehicle that money from many

investors to invest in . Hedge Funds can trade in a variety of instruments than

mutual funds, they are usually only open to a certain level of accredited/experienced .

18) Exchange Traded Fund (ETF): A security that tracks an index, a commodity or a basket of assets like an

index fund, but trades like a on an exchange. By owning an ETF, you get the of

an index fund as well as the ability to sell short, buy on margin, and purchase as little as one share.

One of the most widely known ETFs is called the (SPDR), which tracks the S&P 500 index

and trades under the symbol SPY.

19) Initial Public Offering (IPO): The sale of stock by a private company offering its stock to the

. Also known as “going public” or a “public offering” or in England as “floating the

company.” IPOs are often issued by smaller, younger companies seeking the capital to expand, but can

also be done by large privately owned companies looking to become publicly traded. Most famous

recent IPO: Facebook

20) Bull Market: A financial market in which prices are or are to rise (going up).

The term "bull market" is most often used to refer to the stock market, but can be applied to anything

that is traded, such as bonds, currencies and commodities. Bull markets are characterized by

optimism, investor confidence and expectations that results will continue.

21) Bear Market: A market condition in which the prices of securities are (going down) or

are to fall.

22) Long: The term we use when we are buying a stock or security because the price is going

. Also known as “ .” We say we are bullish on the stock, because we believe the price

is moving or is to move upwards.

23) Short: The term we use when we are selling a stock or security because the price is going

. Also known as “ .” We say we are bearish on the stock, because we believe the

price is moving or is to move downwards.

24) Diversification: A risk technique that mixes a wide of investments within a portfolio. A portfolio with a wide range of different kinds of investments will, on average,

yield higher returns and pose a than any single investment found within a

portfolio.

25) Portfolio: A grouping of financial assets you hold within your brokerage

, such as stocks, bonds and cash equivalents, or even precious metals. Mutual funds,

exchange-­‐traded funds and hedge funds can also be a part of a portfolio.

26) Brokerage Account: An arrangement between an investor (such as yourself) and a licensed brokerage

firm that allows the investor to with the firm and through

the brokerage. These orders are then carried out on the investor's behalf. The investor owns the

assets contained in the brokerage account and must usually claim as income any capital gains he or

she incurs from the account.

27) Order: An Order is an instruction from the client (you) to the broker, electronically or verbally to

or a stock, bond or other financial security. There are lots of order types, but we are only

going to use and discuss two types during our course.

a) Stop Loss Entry Order: This is an order to create an " " order when the market

reaches a SPECIFIC price that YOU specify. Use it when you want to enter the market at a

price than the current price (higher price if buying, lower price if selling) This is the type of order entry

WE use in Courtney’s system.

b) Stop Loss Exit Order: This type of an order tells the broker to convert the Stop Loss Exit into a

“ ”order when a specified price is touched. The Stop Loss Exit Order will

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you from losing more on a trade than you are prepared to. It is a form of risk

that we always use.

28) Stopped Out Means that the stock price has gone you (moved in the opposite direction of

what you expected it to do) and triggered your stop loss exit order, which got you of the trade.

29) Stopped In: Means that the stock price has moved (moved in the direction of

what you expected it to do) and has triggered your Stop Loss Entry order and got you the trade.

30) Entered Order vs. Executed Order: An Order is simply a request by you to the Broker to

place an order on your behalf. The order is not “ ” or “filled” until the market reaches the

conditions that you have specified to place your order.

31) Commissions: The price you are charged by your for every order that is

(not just entered, but actually executed) or Filled.

32) Technical Analysis: The process of looking at price action to forecast/determine

price action. It is a study of graphs or charts that tells you to buy.

33) Fundamental Analysis: The process of evaluating stocks by attempting to measure the real value of

the stock based on the situation of the company. This type of analysis tells you to buy.

34) Charts: We are going to be showing you a Software Program we use that contains

(on stock charts) showing price of a particular stock or security for

different time periods. These time periods can be Daily, Weekly, or Monthly. The name of this

Software Platform is .

35) Price Bars: These are the Bars representing price that you will see on a stock chart.

There are four components of each Bar.

a) : the price the stock is at when the trading session for the day

b) : the price the stock touched during the trading session (within the day)

c) : the price the stock touched during the trading session, and

d) : the price the stock is at when the trading session for the day.

36) Support: The price or price range where historically over time, the stock price has difficulty

falling . This is the price where a LOT of Buyers tend to enter the stock market (buy). The

support level is more difficult to break through the more often it is approached but not broken

through. Support can become .

37) Resistance: The price or price range that the stock price has difficulty rising . This is the price

where a LOT of Sellers tend to exit the stock market (sell). The resistance level is more difficult to

break through the more times it is approached but not broken through. Resistance can

become .

38) Trade Journal: A dedicated of all of your Trades, Trading Ideas, Trading Plans and Trading

Psychology that you complete on a basis. A complete record of all your trading. This record will

be useful later for (follow-­‐up analysis and review) and determining what type of

trades worked well and those that did not.

39) Trade Plan: We want to have a plan for each trade. What is the basis for the trade? What

could go wrong with the trade and why? What is the Fundamental and Technical analysis that is telling

us what we should buy and when we should buy? What is the Entry, Stop, and Position size? We

always want to have a plan and trade the .

40) Investors.com, Yahoo Finance.com: Take some time to go to these sites now and look at them over so

that they are familiar to you. We will be using these sites on a basis, and they will be a big

part of your procedure.

41) IBD 50: Part of the Investors.com website where we start the process of looking for the Best of the

Best Stocks. Also referred to as “ .” We will also cover this more in depth.

42) Execute FLAWLESSLY!: One of Courtney’s favorite phrases! To do this we must have the proper

, , and PROVEN TECHNIQUES THAT WORK WHEN

YOU FOLLOW THE RULES. All of these are the foundation of what you will learn during your course.

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STEP THREE:

Click on the link below to watch the “Newbie” Webinar, where Courtney discusses the very basics of stock

investing.

www.ftipretraining.com

STEP FOUR:

Now that you have watched the “Newbie” Webinar and heard Courtney discuss choosing your brokerage

firm, do your research to determine the best broker for you. Once you’ve selected your broker, go ahead

and complete your application to get your account set up. Once you are approved, the next step

is to fund your account so that you will be ready and able to trade once you’ve completed your course.

STEP FIVE:

Review the information on the pages that follow

Types of Charts -‐‐ Get comfortable with the look of a stock chart. What do all the bars mean?

Websites We’ll Be Using – Visit each of these websites. Browse around and get comfortable with

navigating through each of them.

Your Brokerage Website -‐‐ If you have opened your brokerage account, we suggest you start reviewing any

tutorials that your broker supplies, so that you can start to learn their particular trading platform and how

to place trades on their site. Each broker’s platform will look a little bit different, and we will not be

covering how to use your broker’s specific platform during your course.

FAQs – Frequently Asked Questions – Read these over and get some of the most commonly asked

questions that our students ask us, answered!

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1. OHLC Charts – also called a Bar Chart

TYPES OF CHARTS/BARS

What is an OHLC chart? It’s also known as an open high low close chart, as the name says. Each piece of the bar in a

bar chart represents one of those 4 elements. It shows the open, the high, the low, or the close for that time frame.

What do we mean by time frame? For OHLC charts, each bar represents a period of time selected by you. This can be

days, weeks, months or even hours and minutes.

The left horizontal tick always represents the opening price. This is the first price the stock trades at within the chosen

time frame. The highs and lows are the shown as the tips of the vertical line. These are the highest prices traded

within the chosen time frame. The closing bar is the right horizontal tick represents the closing price, or the last price

the stock traded at within the chosen time frame. For all examples I give you, I will be using a bar chart.

The one bar on the left is only a piece of the entire chart. Stock charts are actually made up of many of these bars in a

series to give you a good picture of where the stock is, as you see to the right.

2. Candlestick Charts

Some people prefer using Candlesticks. Candlestick charts use a “full” and “empty” candle stick to designate a decrease

or increase in price. ”Full” or black candles indicate a decrease in price while “empty” or white candles represent an

increase in price. The main parts of the candlestick are the body, and the wicks. The wicks indicate highs and lows in

the price, while the top and bottom of the body indicate opening and closing price for the time-‐‐frame selected. If a

candle consists of only wick with no body, this is called a doji. A doji occurs when the opening and closing price are the

same or very close. They look like either a cross, and upside down cross or a plus sign, depending on the length of the

wicks.

The candlesticks on the left are only a piece of the entire chart. Stock charts are a series of candlesticks lined up to give

you a good picture of where the stock is, as you see to the right.

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WEBSITES AND RESOURCES WE WILL BE USING

Here is a list of resources you will need to familiarize yourself with:

1. Investors.com – IBD 50 List

This is where we will begin our fundamental analysis. This site will save you a lot of time and money. The

basic site is FREE and you will get end-­‐of-­‐day data. It will update everyday, which is good enough for what

we use this site for. If you want up to the minute data (not required) there is a small monthly fee.

2. Finance.Yahoo.com

This is the best place I know of for fundamental analysis of American stocks. This is a FREE site. I recommend

trading mostly American stock. We have access to the best information about American companies. When

you start to look at companies in other countries, good financial information becomes less available. In

China, companies are not even allowed to give out information about their businesses!

3. theglobeandmail.com

This is the best place I know of for fundamental analysis of Canadian stocks. It’s very much like Yahoo!

Finance for American stocks. First go to the investment section, then go to Globe Investors Gold. This is a

fantastic place for trading Canadian stocks.

4. ProRealTime.com

I use this site the most to review charts. Again, use the free version. It’s not “real time,” but it does update

daily, and that’s good enough for what we use it for. You can also get ProRealTime in many different

languages! One of the things I like best about this site over other charting sites is that I can keep a list of all

the stocks that I am interested in. If I want to trade in Asian equities, I don’t use this site.

5. StockCharts.com

This is my second favorite stock charting site. I like that I can pull up 10 indicators/charts per page at one

time. This site charges a small monthly fee, somewhere in the range of $10 -‐‐ $20.

6. ChartNexus.com

I use this site for Asian equities. This is the only site I know of that has information for markets like Indonesia

and Malaysia that is not just in their own languages.

7. FreedomTraderSuccessTools.com

This is your support website that you will have access to after you complete your course. You will be able to

view tons of videos and review all that you have learned in your course.

8. Enter Your Broker’s Website Here:

______________________________________

This is where you will be entering and exiting all the trades you will place. Each Broker’s platform is a little

bit different, so make sure you visit their support site to watch their tutorials on how to place your trades.

9. Investopedia.com

We don’t use this website on a regular basis. I just wanted you to be aware of this amazing resource. This

site contains a wealth of free trading education (Go to the Active Trading Tab at the top). In addition, they

have a great dictionary you can use to learn various trading terminology. You will also find a list of brokerage

firms and comparisons here: http://www.investopedia.com/active-­‐trading/compare/discount-­‐brokers.aspx

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FAQs (Frequently Asked Questions)

WHAT’s NEXT – AFTER THE FREEDOM TRADER INTENSIVE

Q: Wow I sure got a lot of new information at the Freedom Trader Intensive! Where do I begin?

A: Shortly after you return home, you will receive an email giving you access to your follow up support

website, Freedom Trader Success Tools: www.freedomtradersuccesstools.com

Once you have your access, we want you to first review the content of your course in the order the subjects

were covered at the course. Use your notes to follow along with the videos and other educational material

provided for you on this website.

On this website Courtney also reviews: Trader Psychology, Picking the Best of the Best Stocks – (you’ll do

this each weekend); Risk Management – know this before you buy any stock, as you’ll need to know how

many of those Best of the Best stocks to buy; and Channel Breakout and Trend Analysis technical rules on

entering and exiting the trades. We will also be sending you another BONUS after your course completion!

A follow-­‐up “To-­‐Do List” will be sent to your inbox as a series of email messages prompting you to follow

through the various steps to take. The series is called the 8 Steps to Investment Success, and it’s designed to

take you through all the steps you’ll need to set yourself up to become a successful trader. Do these steps in

order, combined with your notes, as well as use the resources on the support website, and you’ll be ready to

trade before you know it!!

Q: While watching the Technical Support Videos on the ProRealTime site, it seems to be software. Are we

supposed to buy their software? I only remember Courtney referring to the website membership.

A: ProRealTime is a free website as long as you use it only for end of day data. We really only need the end

of day data, so you do not have to purchase a subscription to receive the real time data. This end of day data

is updated usually by 4:15 pm Eastern Standard Time. This allows you to begin your review of end of day

activity and how the day’s changes have affected your stocks and ETFs as well as your buy/sell orders.

Note: Since ProRealTime automatically closes after a predetermined period of time, it might be best to just

close your ProRealTime website, e.g. logout, and then log back in so you won’t be in the middle of looking at

your holdings and find that ProRealTime has picked “now” to reset itself.

Q: Should I use the Simplified or Complete Version of the ProRealTime workstation to view charts?

A: Use the ProRealTime Complete Version to view the charts.

Q: ProRealTime seems to monitor different markets, which one should I purchase?

A: You do not need to purchase their software or Real-­‐time data to trade stocks and ETFs since close of day

data is fine for use with Courtney’s trading methods.

Q: Every time I want to choose a stock using the search feature at ProRealTime, I get several similar

entries for the same symbol. For example when I want to select Tractor Supply I get the following

choices listed below. Which one should I use?

-‐‐-­‐ TESCO TSCO LSE

-‐‐-­‐ Tractor Supply Co. TSCO NASDAQ Stocks

-‐‐-­‐ Tractor Supply Co. (Bat) TSCO BATS US

A: You should always choose the symbol associated with one of the 3 major stock exchanges: NYSE,

NASDAQ or AMEX. In this case, you would click on Tractor Supply Co. TSCO NASDAQ Stocks to select it

for display in your ProRealTime Price window.

Q: When looking at ProRealTime for a particular stock listing, I sometimes get a choice that includes

“Bats” as an exchange. Should I use these numbers?

A: Always use the stock symbol and numbers from one of the major exchanges, e.g. NYSE, AMEX or NASDAQ

stock exchanges.

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Q: My ProRealTime charts have 4 Channel Lines for Channel Breakout Trades. Since we’re only using the

55 Day High and the 20 Day Low, can I get rid of the other two lines? How do I do that?

A: You can do the following. Keep the 4 lines as they are part of Channel Breakout but the 20 day high and

55 day low won’t be used until later when you learn to short the market – in an Advanced class.

To make the other lines go away, click on your wrench on the price chart. When the small window opens,

click on the line you wish to get rid of to select it. Then click on the Style drop down on the right lower side

of the box that just opened. One of the choices that appears is “Invisible.” Click on “Invisible” and your line

will disappear. Do the same for the other CB line and then close the open window.

You must then save your changes to your Template by clicking: Templates -­‐> Save or delete, and then select

your current Template. If you have a Backup template, save that one also in another save operation. The

lines should be gone the next time you open PRT. To get them back, just reverse the process!!

Q: How do I remove the ProRealTime Price/Info Bubble that pops up when my cursor stops on one of the

price bars?

A: To turn off the Main Chart Bubble with all the information in it, just go to the "ProRealTime Complete"

window and click on "Options" then move your mouse cursor down to "Display on charts" and then to the

right to "Display 'Cursor details' on chart windows." Left click on "Display 'Cursor details' on chart windows"

and the display will no longer be shown when you stop your cursor on a price bar.

To get the Price/Info Bubble back, just navigate back to "Display 'Cursor details' on chart windows" and left click on it. You'll once again have the Main Chart Bubble back when your cursor moves into the Main Chart

and stops on a price bar.

One other alternative that you have if you have enough room on your screen is to turn off the Main Chart

Bubble as described above. Then to see a Main Chart Bubble “on demand” press Ctrl-­‐d and the Bubble will

appear. You can position it anywhere you want to on your PRT page. To remove it, press Ctrl-­‐d again. If

you've repositioned it after you’ve opened it and then close it, upon opening it again, it will reappear in the

same position as you left it previously.

MISCELLANEOUS TRADING QUESTIONS

Q: I know this is a basic question, but please can you review what it means to be Long and Short?

A: Being “Long” is owning shares of a particular stock whether you bought them or someone gave them to

you as in the case of an inheritance. Being “Short” is having sold shares of a particular stock that you did not

originally own. Typically these shares are borrowed from your broker to sell, and then bought back from the

market when the price is lower and returned to your broker after you've (hopefully) made a profit from

them

Q: I’m new and just finished Freedom Trader Intensive. I see a stock that is going up like crazy and I want

to get in on the current huge trend upward so as not to miss some big profits. Can I just buy it at market

price?

A: All trade entries should be done using either Channel Breakout or Trend Analysis entry points plus a small

buffer of $0.10 (use a 10 cent buffer for stocks priced around $100 and lower).

Q.: I’ve just finished Freedom Trader Intensive, can you review how I should allocate my funds?

A: For a smaller portfolio size, say less than $5,000 up to $10,000, you should plan on allocating 50% of your

portfolio amount to trading Hot Hands and the remaining 50% for Seasonals.

For a portfolio of $10,000 and up, you would allocate 10% of your funds for Seasonals, 10% for Hot Hands

and the remaining 80% for stocks, e.g. Best of the Best stocks, Pitbulls, etc.

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Q: Which brokerage firms do you recommend?

A: Short answer, we officially do not recommend any, however our students have told us that Scottrade,

Think or Swim, TradeStation, (TOS and TS both debit your account when you enter and order), Fidelity, E

trade, Zecco and Interactive Brokers are all good (IB is ADVANCED -­‐Scottrade is simple to use). Look for a

combination of good support and low fees.

Q: When should I open my brokerage account?

A: Before you get home from the course, if at all possible. This way you can start trading on Monday!

Q: Should I practice first, using a paper trade (or simulated) account?

A: No, never! We want you to actually get started trading right away. If you feel you must do some testing

first, we think that back testing is the better way to go. If you paper trade for 2, 3 or even 6 months first,

that’s several months that you are not making any money! And our job is to make money. You can check

trades much faster by going back and checking for signals on past trades to see if you could have made

money. You can test 10 years of back trading in one hour instead of wasting months paper trading.

Q: How do I open an account?

A: Do your research to determine which brokerage firm you will use. If you search “Top 10 Brokers” on the

internet, you will find all kinds of reviews and information. Once you have determined this, you can either

call the broker, or many will allow you to create your account online via their website. With some firms, you

can even start with as little as $1! All you need is a valid government issued ID, proof of residency through a

utility bill or banking statement, and tax information (W-­‐9 in the US) You will fill out an application form

asking for your basic information and about your trading experience. Once you submit this information, it

will take a few days for approval. Once approved, you’ll then fund your account with at least whatever the

brokerage house minimum is.

Q: How much do I need open a brokerage account?

A: With some brokers, you can fund your account with as little as $1. You can get started comfortably with

$2,000 – 3,000, but ideally you would start with minimum of $10,000. This is NOT MANDATORY OR

NECESSARY. What’s important is to GET STARTED with whatever you have!!! If your account is less than

$10,000, it’s best to find a brokerage house with low commissions like Zecco.

Courtney will teach you how to trade regardless of the size of your account.

Q: Do I have to learn a lot of different techniques to be able to trade in all the different types of markets?

A: You can use the methods that Courtney will teach this weekend to trade any market: stocks, futures,

forex, bonds, equities, you can use his methods to go long or short.

Q: Will I need to spend additional money to subscribe to any financial publications, purchase any special

software, or make sure I have cable TV to listen to CNN or other financial networks?

A: NO! You will not need to subscribe to any special or paid financial news to use Courtney’s System. (By the

way, any news that you get is too late already!)

Q: Where can I get a copy of Courtney’s Book on Forex/Foreign Exchange Trading?

A: The name of the book you're looking for is: "How to Make a Living Trading Foreign Exchange: A

Guaranteed Income for Life." Even though the title says Forex, we find it a great reference for anyone, even

if you are only trading stock. The techniques are the same for forex as stocks so this is a handy reference

manual for any type of trading. Check the online book sellers, e.g. Amazon.com, Barnes & Noble (bn.com) or

AbeBooks.com. The link for the book at Amazon.com is: http://tinyurl.com/c4mucce

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NOTICE

U.S. Government Required Disclaimer - Commodity Futures Trading Commission Futures and Options trading has large potential

rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and

options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures, stocks or

options on the same. No representation is being made that any account will or is likely to achieve profits or losses similar to those

discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN

ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE

TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF

ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE

ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS

BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL, OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO

THOSE DISCUSSED WITHIN THIS SITE, SUPPORT AND/OR TEXT. OUR COURSE(S), PRODUCTS AND SERVICES SHOULD BE USED

AS LEARNING AIDS ONLY AND SHOULD NOT BE USED TO INVEST REAL MONEY. IF YOU DECIDE TO INVEST REAL MONEY, ALL

TRADING DECISIONS SHOULD BE YOUR OWN.

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