I've revised my day trading plan over the weekend. I'd like to post them here from time to time so when I look back someday I would be able to see how my trading plan has evolved. As a novice trader, I can see many could be easily intimidated by other traders in the forum. I was not talking about the verbal abusement. Actually, I was refereing to that beginners are often intimidated by professional/super stars' performance. As a beginner, we often get frustrated when we work so hard , but only accomplish so little, while stars can accomplish so much so effortlessly at least they looked so effortlessly. I believe if we are persistent and work hard, we will succeed. If you are already super star, please also keep in mind, no matter how good you are, there are always someone in this world can do better than you do. My ES day trading plan 1. stop trading after 100 USD loss or 3 consecutive losing trades 2. trade no more than 5 trades a day 3. reward to risk ratio should be >2, stop 1-1.5 pts (if stop has to be >1.5 pts, then pass the trade and wait for other opportunities) 4. do not initiate positions in the last 30 minutes (3:30 to 4pm). Close losing trades by 3:30. May hold winner till close depending on the market condition. 5. trade only one contract (ES, no advantage trading NQ or YM over ES since ES has best liquidity). 6. do not trade open 60 minutes. 7. scalping style trading, will not hold winning trade for 50% retracement. 8. my trade setups (some specific price actions that I trade)
I've seen a full day's trades posted by some "superstar" traders and some of them call trades live, and I'll tell you that often it's not effortless. Often it's messy, scratch here, small loss there, small loss again, (that's a main ingredient of superstardom, small losses) then suddenly whoosh! the persistence pays off, they catch the wave and they know how to ride it all the way to shore. I used to gaze in awe at Arjun's P/L posts, every day two hours or less into the trading day he's posting 4- and 5-figure gains. He traded futures and I was struggling just to get myself out of the sim account and into the live account with a single lot of CL and ES. But I wasn't intimidated. I knew he was a human being sitting in front of a trading platform just like me and I knew that if he could do it, I could do it. So I think if you stick with your plan and hone it over time, you will get there. You're not even trading full time, that alone is tough.
Thank you NoDoji. I realize that winning/losing has nothing to do with market and it has everything to do with the trader. I also believe if it is done right, money can be made from market (not a random process in its nature). This has kept me working on my trading.
5-11-2010 Total trades: 10 RTs winner: 4 loser 6 net p/L: 0.75 pt Today was an experimental day for me. I thought I could use 1-2 min chart to improve my decision time. I did see many setups with lower time frame, but forces at higher time frame causes these signals in lower time frame invalidated quite often. Anyway, I did break my max daily trades rule (<5). I entered short position several times between 12 to 2, had more loss than winner. I managed to keep loss between 0.5-1.5 pts per trade. I did hold the successful short a little longer than I would usually do (because I had to re-start the computer). So I was able to make even with a fewer winners. I didn't short at 1:50 (I had to go to a meeting). Then I figured I could by 50% fib retrace. It did work briefly. At 62% retrace, I went long again and decided to hold my position for a little wider stop since I've seen a falling wedge was forming. I exit at the top trend line of faling wedge. The breaking out of faling wedge at 3:34 was a powerful move after a HL shakeout before breakout. However, I didn't initiate new position after 3:30pm (can't breaking too many of my rules).
5-12-2010 Total trades: 5 RTs (ES) winner: 2 loser: 3 net p/l: 2 pts I entered several shorts between 12:30 to 12:50. The price didn't go down as I would expect and then I realized it was doing some consolidation and next breakout could be retest intraday high at 11. I got out before my stop got hit as soon as I sensed the price was not moving as I expected. Since I don't have very good target if price retest high, I didn't go long either. I went short at 1168.25 (1 pt stop 1169.25) at 1:20pm again after mini-demand line broke, exit at 1167. The price did a throwback retest of trendline and broke the 20 bar moving average again. I didn't benefit from the second leg down. I went short again at 1169.50 (stop 1171, target 1167) at 3:10pm. I was able to manage to hold for two legs down until my target hit. I was a bit nervous and was thinking of moving my target to 0.5 or 1 pt up several times. At one pt, the price spiked back to 1169.75, but as soon as it close below the 20 bar MA second time, I had good feeling that it would work as planned. I was trying to loosen up a little bit. Instead of scalping for a few ticks, I was trying to pick trades that would give a little more profit target. However, with one contract, it was not easy psychologically to me. I might feel better if I had two contracts. I am not eager to trade two contracts until I can do it consistently with one contract. If I don't have edge with one contract, I don't see how I can do better with two (in reality, I most likely would lose 2X faster than one contract).
5-13-2010 total trades: 4 winner: 3 wash: 1 net p/L: 2.25 pts I did several scalps from long side between 12 to 1:50pm. The price movements between that time frame was a bit choppy and could be considered laborious. I was expecting a consolidation day today after yesterday's run. The EURO looked like short term bottomed this morning, but started selling off after 2pm. This probably has caused some selloff of indices. Frankly, I didn't really expect such a big drop in the last hour. I thought 1164.5 and the swing low at open would have hold. I didn't take any short position during last hour selloff.
5-14-2010 Total trades: 2 RTs (ES) winner: 2 net p/l: 1.75 pts I thought selling was probably done by 12 noon. I went long at 1128.5 around 12:35 (breakout of down trend channel and small throwback). I was a bit nervous and didn't give enough time for the trade to work out. I went long again at 1129.50 at 12:48pm anticipating a bounce from the mini-demand line. Stop was set to 1127.75 and got out at 1131. I was in meeting from 1 to 3pm ET. The price was forming a triangle since 12 noon. It tried to retest intraday low around 3:20pm, but failed. It was a false breakdown of triangle. 3:40's higher low was bullish. Since it was past 3:30pm, I didn't initiate any new position. There were two setups I was planning to trade if it were not in the last 30 minutes. 1. At 3:40, after HL, price broke above 20 bar (2min) MA. 1127.5 was a good long entry. Stop would be 1126-1126.25 below trend line. Minimum profit target at 1129.50 the top of triangle line. 2. breakout of bullflag at 3:50 at 1130.50 (stop 1129, potential profit target 1134.50 the beginning of the triangle)). It was breakout of triangle/throwback forming small bullflag. Vol was increasing on the up bars. Since it was going to the weekend, at least some short covering was due.
5-17-2010 Total trades: 2 RTs (ES) winner: 2 net p/l: 1.75 I saw climax volume on ESat 12 noon and price overshoot over accelerated down trend channel. Some reasonable reverse bar formed near 12:05. I went long at 1117.25 at 12:15 (stop 1115.50, original target 1119)when price broke out of the mini-supply line. I close the trade prematurally with 1 pt profit. I was in meeting from 1 to 2:45pm. Price broke out from resistance level 1125. I didn't chase the breakout. I waited until the price bounced from the uptrend channel line at 1123.5 at 3:22pm (noticed 38% retrace level from daily low was right at 1123.00). One thing I was thinking at the time was to enter trade with limit order on trend line, but wanted wait for a little more confirmation. I went long at 1126.25 at 3:29 (stop 1125.25). The vol was steady and not much throwback after breaking out of the mini-supply line. Again I closed my trade with small gains. The top channel line or previous swing high at 1133 would be good profit target. I read it in some tarding book that in average there are 2-3 good trades per day for SP. I guess I need to be more patient to wait for the opportunity. I really need to focus on my exit. Loss stop might be relatively easy based on personal risk tolerance. The profit target is more difficult to me.
5-18-2010 Total trades: 2 RTs(ES) winner: 2 net p/L: 2.5 pts ES was moving inside a well defined down trend channel. I was able to trade from 11:30 to 1pm. At 11:49, I went long seeing price hit lower 75% channel line and bounced. This was second bottom afetr 11 am's reverse with heavy vol. I went long at 1132.50 (1131.50) and out at 1133 seeing price stalled at 50% down trend channel. At 12:04, price hit exact the lower channel line and bounced. It broke the 50% center line within channel and did a throwback to retest 50% line. I went long at 1131 (stop 1130) and out at 1133 at 25% channel line. Price did manage to break the top down trend channel line. At 12:58, when the price dropped back inside down tren dchannel and simultaneously broke the mini-demand line. I had feeling the reverse/up move was probably over. EURO broke the channel line. SPX had heavy selling pressure. I was in a meeting from 1 to 3pm. Price had benn moving within a channel and made new low and also hitting down trend channel bottom at 3pm. I didn't initiate any new position due to two reasons, 1. selling pressure was steady, so I didn't want to bottom pick, 2. the potential short covering on EURO at any moment could trigger very violent counter trand move on SP, so I didn't short either after 3pm.