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TRADING PLAN
Trading Philosophy / Trading Psychology:
I believe that Financial Markets are 100% psychology driven.
Price patterns are a reflection of the collective psychology of a large number of traders.
Trading psychology also a major factor in my own trading. It is identified as my trading state. Fear and Greed are powerful enemies to profitable trading and I can overcome this by training my subconscious mind to be focused on following a defined trading plan versus focusing on wins and losses.
I am a disciplined trader committed to trading only for profit strictly adhering too my trading rules, plan and standard operating procedures.
My style of trading is aggressive with my preference to trade directional, and pattern set ups. I will trade full time as a day trader and also seek other trading opportunities especially dealing with Options.
I will not have a bias as to where the market may or may not head, I will react to the price, patterns and my tools as they present themselves applying my trading rules.
I trade what I see
Not what I think!
I understand that I cannot control the market, I can control only myself.
My trading state and mindset is the key to the success of trading. I must be rested, fit, healthy and mentally alert. Accepting the stress of trading by keeping focused, calm, disciplined and not distracted is essential for being a professional trader.
Losses are acceptable, not desirable but I can minimize them with compliance to the rules, especially avoiding impulse trades and never being in a trade without a plan or a stop.
Trading is a business and I am here for the profit.
Golden Trading Rules:
Check for Stops and targets resting in the Market then update or remove them.
Look left for previous structure.
Always Set a Stop Loss. Always!
Maintain Discipline.
Avoid impulse trading. Trade with a plan and stand by the rules.
Identify, Predict, Decide and Execute (IPDE).
Do not enter a market within 15 minutes after a news event.
Get S.E.T. (Stop, Entry, Targets) before every trade. (Know where and how to Exit
)
If I lose my ISP then call my Broker immediately and go flat, then work on the technical challenges to get back online.
Keep it simple.
Money Management, Risk Reward and Financial Goals:
I will trade 4 contracts as a unit maximum for the S&P e-mini.
I will trade 3 contracts as a unit maximum in the Russell e-mini.
For every $5K that I add to my account I can add a contract to a unit. If I reduce my account by $2K then I will reduce the contract size.
Commissions, fees, charting services, continuing education and other business related costs are considered essential to trading.
Risk to Reward is preferred a 2 to 1 ratio, but waiting for the set up and trading the rules is paramount and given the opportunity this standard is a guideline.
My goal is to successfully net 9 combined points per week in the market.
My desire is to train for the FOREX so that I can diversify looking for the best opportunities as I see them.
Daily Routine
I will only trade on days when I am well rested, relaxed and not mentally distracted by matters that will divert my focus.
I will spend at least 15 minutes relaxing to music or a form of meditation after a good nights rest before trading.
Conduct a Pre-Market Analysis myself, perform a top-down review of the major markets and develop a plan of the day. The trading day is from 9:30 a.m. (EST) to 4:15 p.m. divided into a morning session, lunch and afternoon session.
I do not trade for the first hour on Mondays.
I do not enter any new trades the last half an hour of the market hours (1545 1615 EST).
After I have met my goal or the market is closed I will log my journal and then spend quality time with my family.
At some point before the end of the day I will revisit the S&P trading day and back test my plan and system.
Pre-Market Analysis
Understanding that 70% of the volatility occurs during the first 2 ½ hours of trading, this step is very important. The goal here is to recognize probable entry or exit points.
Check for and note important reports, events, and or news releases. Include in the plan of the day candidates and times for probable heightened price volatility.
Look at Daily chart with ATR, 60 min and 13 min charts. Was there expansion or contraction?
Annotate the previous days high and close with a black line.
Determine Market Bias. Where is the price relative to the Daily Pivot (Above the Daily Pivot is bullish bias, below the daily pivot is bearish bias)
Note overnight support / resistance levels, double tops/bottoms and trends.
Locate and note significant Swing Points.
Where are the dynamics / stops?
Calculate the previous days Average True Range (ATR).
Review the cash, $OEX Globex and the DAX markets.
Note the %ATR reached up until this point.
Review the charts of the top 10 stocks in the S&P.
Top down analysis is underlying (Weekly) (Daily) trend up, down or sideways? Is current trend with the underlying trend, or against the underlying trend?
Create a Plan of the Day (POD) and Trade what I see with the POD outlining probable entries and exits.
Set ups and the Rules of Engagement (ROE):
I plan to train myself with Neuro-Associative Conditioning (NAC) to be proficient in 3-5 set ups. As I train through repetition and develop an absolute belief in the patterns and occurrences in the two markets then I will commit ROEs for each scenario and include them herein.
At all times I will be aware of what direction the trading markets are in and when I see one of my recognized set ups, I will ask myself these three questions in order; RSI OB / OS then
Where is Price relative to?
Pivots
Previous Structure
The days ATR using Globex numbers
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