The following is an example of one of the ways Investor/RT can be used
to daytrade with a real-life example recorded from the trade in FORE
Systems. 

At the start of the day, open a daily chart, a one-minute chart, and a
time and sales window for the the stock you are going to trade. The
daily chart is used at the beginning of the day to provide a big-picture
reference frame against which to meaure trade behavior at the opening.
You may even wish to keep a small quote page at the bottom of the screen
which quote the market indices. In your charts, set your preferences to
display in blue for up bars and red for down bars (use whatever colors
you wish, in this example we will use blue and red).  These colors will
also be used in your time and sales window, with sales in red and buys
in blue.

There are three visual cues that will be necessary to monitor. First, on
your Time & Sales screen notice how much red or blue is in the screen at
one time. If the screen displays only lines of red then many successive
sales are occurring. An all or mostly blue screen indicates a
predominance of buyers. Shown below is a Time & Sales window that
indicates a lot of buying at the ask price.



Second,  use the Time & Sales window in tandem with the 1 minute chart
to notice if the active trading is in the direction of the short term
trend. Even without any experience reading bar charts one can usually
divine short term trend.  Here we can see that the trade is mostly
buying at 16 and the previous 10 or so bars show the price running up
from 15 3/4.

Third, watch the bid/ask dots on the right margin of your minute bar
chart. Using this visual cue will take a little practice. Investor/RT
creates a blue dot and a red dot on the right of the chart next to the
vertical scale. You will use these to track the position of the bid/ask
relative to the price movement that has already occurred. For
example, if the price is moving up you should see a lot of blue in your
time and sales window as a lot of offers are taken out.  The
corresponding blue dot representing the ask price in your one minute
chart marks the exact point where the trade is taking place.  It is
ideal in this scenario to see the ask price leading the trade in the
direction of the short term trend.  Take a look at the 1 minute chart
below of FORE. 



As you can see from the last ten or so bars in the chart the short term
trend is up.  We even see a little resistance at 16 in the four
preceding minutes where we only saw trade at one price.  But since the
short term trade is up we will consider initiating our trade from the
long side.  Notice that the asking price is 16 as denoted by the blue
dot on the right vertical scale and that it is leading the trade
upward.  At this point two things might enter your mind.  First, a
penetration here might confirm a short term breakout from aproximately
45 minutes of consolidation between 15 3/4 and 15 15/16.  However, the
last six minutes of trade has taken place at 16 and the sellers have not
been enticed to raise their asking price.  You choose to wait until the
market trades through this short term resistance at 16 before you enter
your long.

As it turns out, the 16's held and FORE retreated to 15 3/4 as you will
see in the chart below.  Waiting for a break through 16 saved you from
getting long just before a downside break.  If you got long before the
sideways trade at 16 occured, then you had time to consider liquidating
your position for lack of upside momentum.



Worth noticing here is the fact that we saw all that trade occur at 16
in our Time & Sales window.  Many of these buyers were daytraders like
yourself.  When the market was unable to penetrate 16 there was a
substantial number of long shares who needed to get out, adding to the
downward momentum as the price came off of that level. 

In addition to the characteristics mentioned previously, some other
things you may wish to monitor are tick volume (trade size) and rapidity
of trade.  Tick volume is important because it will help you discern
whether to bulk of the trade is attributable to public or speculators or
institutions.  Share blocks of 10,000 or more tend to be institutional
traders or funds.  Blocks of 1000 or greater could be the speculative
crowd, while the 100 share trades are often public.  When you see large
blocks (greater than 10,000 at a time) trade, try to remember what side
they took and try to look for a pattern.  Rapidity of trade is a way to
gauge the apetite of the trade for positions at a particular price
level.  Slowly occurring, small volume trades display no commitment to
moving the market in one direction.  However, rapidly occurring trade at
the bid or ask may be an indication that the sellers are about to raise
their offer in retreat.  This presents an opportunity for you to lift
the offer before it goes bid and gain the edge as you intitiate a
position.  For example, if a 16 offer is trading a lot and you buy 16's,
then if the sellers raise their offer, the market may now be 16 bid.
You have the edge because you can now use your experience and judgement
to decide if you think trade at the new offer is strong enough to carry
the price higher or if you would like to sell out of your position at
the 16 bid for a wash trade (less commissions).