| George Lane completed his 47th year of
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| | in down-trends, the closing price tends
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| trading in December 1996 and is still
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| | to be near the lower end of the range.
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| going strong. After many years of trading
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| | Two lines are used in the Stochastic
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| in the grain pits in downtown Chicago,
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| | Process-the %K line and the %D line. The
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| Lane has shifted to screen trading during
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| | %D line is the more important one and is
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| his "retirement" in a small community
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| | the one that provides the major signals."
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| about 80 miles south of Chicago.
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| | "We had %A and %B-we went through the
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| However, retirement means different
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| | whole alphabet twice, working on things.
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| things to different people, as Lane was
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| | Then we discovered %K and then %D and the
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| up until 2 a.m. trading Italian bonds the
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| | darn thing worked. So, we quit the
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| night before he spoke with this reporter.
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| | research and went into the pit every day
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| Lane said, "I was having fun! ... it
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| | and started making a living," Lane said.
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| beats working for a living!"
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| | He calls himself a strictly technical
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| Early in his life, Lane was set on
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| | trader. "I read the fundamentals, but the
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| becoming a physician-as his father had
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| | fundamentals are not the way to
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| been. But, then "I was out roaming around
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| | trade---the technical side is so much
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| Chicago one afternoon. I wandered into a
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| | more lucrative."
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| building to buy a cigar and I heard a
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| | But, "it is hard work if you are going to
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| bunch of noise upstairs. I went up and
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| | be a trader- you've got to be looking at
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| saw these men standing around yelling,"
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| | your computer five to six hours a day,"
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| Lane said. "All of a sudden, I was hooked
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| | Lane said.
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| and medicine dropped from the picture,"
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| | Currently, in his "retirement" Lane
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| Lane said.
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| | trades "about four to 12 times per day."
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| While initially Lane worked as a broker,
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| | His time frame is "45 minutes to 1 1/4
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| he said "that didn't work out very well
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| | hours," with average gains of "$150,
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| ... because as a broker you want to give
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| | $350, $750" per trade. "They all add up
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| customers advice that is in their best
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| | at the end of the day."
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| interests. Sometimes what you think goes
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| | "You can make $5,000 a day trading
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| against what the firm thinks."
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| | one-lots," Lane said. From his screen,
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| In the late 1950s, Lane purchased a
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| | Lane trades primarily off of
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| membership on the Chicago Open Board of
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| | three-minute, 15-minute and 30-minute
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| Trade for $25 and started trading the
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| | charts, relying on "stochastics, volume
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| grains. The Chicago Open Board of Trade,
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| | and trendlines."
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| now known as the MidAmerica Commodity
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| | Recently, Lane has been trading the S&P
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| Exchange, was originally founded in 1868.
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| | 500 futures contract at the Chicago
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| At first, Lane said, "I wasn't doing very
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| | Mercantile Exchange. He sticks to liquid
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| well. An old timer came over to me one
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| | markets, avoiding thinly traded contracts
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| day after the dose and asked me how I was
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| | such as pork belly futures or lumber.
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| doing. Every night after trading, he and
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| | Lane doesn't confine himself to U.S.
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| I went down to the local tavern and as
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| | markets, however, estimating that 20% of
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| long as I bought the whisky, he taught me
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| | his trading extends to foreign futures
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| everything he knew about the markets."
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| | markets. "German bonds and Italian bonds
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| "He introduced me to the Taylor trading
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| | trade very actively," Lane noted.
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| method, which is a three-day trading
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| | However, Lane said he never trades
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| cycle" Lane explained. Lane began to pick
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| | without a stop-loss order protecting his
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| up trading and started to see some
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| | position. "That's the secret to making
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| success in the pit. He eventually became
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| | money in commodities-control the size of
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| the president of the Investment Educators
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| | your losses."
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| Inc. "I'd trade all day and then we'd
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| | Lane recommends that beginning futures
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| meet at night," Lane said. In that
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| | traders read "John Hill's three books on
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| capacity, he invented 64 "stochastics," a
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| | charting basics-if you are a good
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| widely used momentum indicator.
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| | chartist-the charts talk to you."
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| "Stochastics measures the momentum of
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| | "You can learn how to do it yourself,"
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| price," Lane explained. "If you visualize
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| | Lane said. "Brokers are salesman. Never
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| a rocket going up in the air- before it
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| | take advice from a broker. Because, then
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| can turn down, it must slow down.
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| | you are admitting that you don't have
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| Momentum always changes direction before
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| | enough smarts to make your own
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| price ... It is a very sophisticated
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| | decisions." Asked what was a key factor
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| tool," he said.
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| | in success in commodity trading, Lane
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| According to John J. Murphy's book
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| | replied "greed."
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| Technical Analysis of the Futures
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| | "Trading is fear and greed and if you
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| Markets, stochastics "is based on the
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| | have enough desire to have a successful
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| observation that as prices increase,
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| | financial life-you can do it," He
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| closing prices tend to be closer to the
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| | concluded.
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| upper end of the price range. Conversely,
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