Rule of 10 Journal

Yes I did. I closed out the last contract short near the eod at 44.25. I thought the bailout of FRE and FNM was a possibility although I didn't think the market would gap this high with that type of news.

 

I am sorry, but for testing I am not going to stay up all night long, and I mentioned earlier that overnight trades should be automated.

On the other hand we would like to see some trades from YOU....

I think the first overnight short from 76.5 would have been stopped out before dropping but the next one from 80.25 gave us 7 points getting out now at 73.25, so the 2 trades together still 4 pts gain...

Edit: Apperently got out too early, still dropping...

 

While looking back over the Journal to get a good grasp of exactly what volente_00 is talking about, I've compiled a list of the posts that he made while attempting to explain exactly what the Rule of 10 Trading System was and how it should be used to trade the ES e-mini's.

In my final analysis, while I believe that volente_00 is a good discretionary trader, the Rule of 10 most definitely is not a good trading system.

 

volente_00's Rule of 10, Volume I

Volente's first posting in this Journal about his "rules" ... so far, so good.

Here is where we introduce the concept of the "rule of 9-11" (first mentioned by Pekelo in this Journal).

And here we have the rule of "never leting a win turn into a loss" (um, sounds good)

Here volente_00 admits this is actually a discretionary system.

In this post volten_00 mentions the importance of the “power of belief”

In this post, voltente_00 mentions the importance of sticking to his 3 pt loss rule when taking ROT trades on trend days and getting stopped out (I guess he can’t trade the trend, huh?).

 

Checking it again, my broker's chart says the high was 79 before the drop, so the stop loss was untouched, giving a 5+ gains, depending where one would have taken the gains...

 

volente_00's Rule of 10, Volume II

Here is where volente_00 first mentions the no shorting on gap downs or going long on gap ups.

Now volente_00 is talking about using volume as a confirmation

He also mentions that it helps to look out for the “program traders” (as if he knows how, LOL)

And here volente_00 mentions the 3:30 (or later afternoon) reversal, when the bonds close.

Here volente_00 mentions “T Day and the 10:30 Crew”. I don’t know what they have to do with the Rule of 10, but I’m sure there is some relationship.

Here volente_00 admits that it’s really just a “coin flip”.

 

volente_00's Rule of 10, Volume III

NOW, THIS IS THE FIRST POST WHRE I HAVE EVER SEEN VOLENTE_00 INTRODUCE THE CONCEPT OF MOVING AVERAGES INTO THIS SYTEM. I guess there’ll be more to come with this revelation.

… and here is volente_00’s response after Old Trader point blank questions his use of moving averages.

In this post volente_00 shows specifically how to use the Moving Averages in conjunction with the Rule of 10 Trading System (you learn something new every day).

Ah, I’ve been looking for this one.

Here is where volente_00 gives the exact SMA settings that you should use when interpreting the Rule of 10 trades.

That’s it for now.

But I think that’s enough.

Good trading.

 

I mentioned this earlier, but it is NOT a trading system, but an entry rule. Without an exit rule it is not a system... As it is clear from this journal, we have at least 3 different kind of exit rules being used... Kind of makes it interesting to compare...

Edit: I guess we missed a long signal (too busy posting) at 1269, it bounced up to 1273 before falling further, so a breakeven or better.

 

Just to let you folks (and Magna) know that I'm not here to just trash talk, here's a tool you can use if you really do want to trade the indice using the Rule of 10 (I obviously don't, so I won't be using this tool).

It's called the Swing (High/Low) indicator and it is available in a number of different software packages. This chart is from NinjaTrader for anyone who wants to know.

It's purpose is pretty obvious.

It can be used to objectively measure the swing highs / swing lows (based on the timeframe that you are trading), something that is crucial if you hope to trade the markets using this sytem, and FTR, an element which is sorely lacking in this Rule of 10 Journal.

Good trading.

 

It's not even an entry rule.

It's a tool that can be used to measure the markets progress, and, in hindsight, determine whether it is trending or operating in a trading range.