Phantom of the Pitsby Art SimpsonAbout the authorArthur L. Simpson is an independent trader and has been a member of the Chicago Open Board of Trade and (now) the MidAmerica Commodity Exchange continuously since 1971. He is a registered floor broker with the National Futures Association. Art is a licensed Merchant Marine Officer by the United States Coast Guard. He is also a licensed pilot issued by the Federal Aviation Administration. He holds licenses issued by the Federal Communications Commission. His license includes first class radiotelegraph, general radiotelephone operator license, GMDSS radio operator/maintainer license and an amateur extra radio license.Mr. Simpson has worked assignments with the United States Information Agency, Military Sealift Command and has served as chief engineer at CBS radio in Champagne, Illinois. He has served as a broadcast consulting engineer and has been instrumental in construction of broadcasting stations.Art lives in Indiana with his wife Karen and their family of pets. His interests include trading, flying, amateur radio, computer programming, music and world travel.1C O N T E N T SAbout the author Preface ForwardChapter 1. Phantoms InsightsChapter 2. Your BookChapter 3. A Little HistoryChapter 4. Preparation for Trading Chapter 5. Rule OneChapter 6. Rule TwoChapter 7. Trading with Rules One and Two Chapter 8. Day TradingChapter 9. OptionsChapter 10. Cloud HoppingChapter 11. Time to Reflect on Gods RulesChapter 12. When We Lose One of Our Own by Harold B. Simpson Chapter 13. Behavior ModificationChapter 14. A Wink is as Good as a Nod To a Blind Horse Chapter 15. Quicker Than the EyeChapter 16. Your Comeback After a Big Drawdown Chapter 17. Phantoms Christmas GiftChapter 18. Rule Three You Say? Chapter 19. Is the Market Always Correct? Chapter 20. The Third RuleChapter 21. Tie Ribbons on Your Trading Chapter 22. Trading and Three Accidents Chapter 23. My Order Was Filled Where? Chapter 24. Your Trade Program Chapter 25. Phantoms ChatEditors Notes on Knowledge & Research2PREFACEIt had to happen I thought to myself as I took a walk to the top of a small hill just behind my home. There isnt a single trader who wouldnt give half his trade equity to know how the big guru did it! Knowing his thoughts could be worth thousands of dollars in a single trade. For decades traders have wondered what is so special about perhaps the best trader ever.It was six months ago that we had talked about giving some back. And why shouldnt he give some back. Were talking knowledge and you cant put a value on knowledge or experience. He had both. We agreed that to give back it would have to be without expectations of any recognition or rewards. He came up with a plan just as he always did. We would go on the Futures Magazine Traders forum and sneak information onto the forum and see how well the reception would be for the new knowledge. First he called me every name he could think of calling me other than my name.I wasnt happy with any of the names until he asked, how about POP? His agreement to give back (knowledge) to other traders was really important to him at this stage of his life. I could hear it in each breath of his voiced words. I could see it in his heart as his face mirrored his concern. I could see he was taller than usual that day in the spring.It was almost thirty years ago that I had first met him. I didnt see him as a tall man until years later. Over the years he had grown taller than I had imagined possible. Not in height but in his confidence, his manner of thought, his gestures, his speech and all the characteristics you would expect of a hero. I met him in the pits in Chicago on even ground. We were trading the same futures. I got the best of him that day but just one lesson he taught me by weeks end. A market is more than a day!The name POP sounded like a setup for me. He stopped at the top of the hill and looked to the sky as he urged me to agree on always keeping his identity confidential. He said I will not accept the credit for my good fortune and dont want recognition for my insights on trading. He looked me in the eye and said from now own you may call me Phantom of the Pits! Yeah, POP I thought to myself.As you progress from page to page youll see the importance of Phantoms insight on trading as I have over the years. Trading is not as we all thought. Few have ever approached his methods in trading. How do you measure the worth of a man or women I still ask myself after that short walk to the top of the hill. Here is a trader who is the best trader I have ever known and perhaps the best trader in the world. We will measure his worth by his deeds and insights into trading! Yes, thats how we will size up P