Trading plan and rules to fallow Entry Exits Stops For entry I will use market orders on small spread stocks. On the bigger spread I will use limit orders. Profits in trades should be .25-.50 Stops will be very tight, maybe .10-.25 max 300 will be my default share size. Trades per day: 10-15 Preparation before market opens pre market hours I will check the yahoo finance web page for stocks that have earnings, upgrades / downgrades that day. I know that some traders watch pre-market action. Iâm not sure how so I will skip that part for now. Trading and scanning for opportunity when market opens for trading First 15 minutes: no trading due to high volatility During these 15 minutes my job will be to spot which sectors are up/ down that day I will look at qqqq and spy charts to find out if market is in up / down trend If qqqq and spy are showing downtrend, Iâll focus on shorting stocks that are mostly red. If the market is in an uptrend, I will look for long positions. I will be using 5 min and daily charts for the stocks Iâm watching along with qqqq and spy 5 min chart. Scanning market The scanner I have is for stocks that made new high/low from the previous day (this scanner is the only one included with the platform I use) Iâm planning to get at least one more scanner. I will be scanning about 50 stocks from the watch list. These stocks should have at least 300k current volume. Strategies to use during regular market hours I will consider trading breakouts only using the following patterns: triangles, pennants, flags and measured moves. I chose these patterns because they look very easy to spot. For the other methods I will be using, please see the pictures. http://img252.imageshack.us/img252/1230/shortsetupzz3.png http://img172.imageshack.us/img172/5194/longsetupxb1.png Rules to follow: In case of 5 losses in a row: stop trading for that day. Losses of $300 per day: stop trading that day Donât trade during lunch hours. Education: I decided not to spend any money on courses, rooms and etc after considering what you guys told me. I will read the books you recommended within the next month or so. After each trading day I will analyze my trades and ask myself, âWhat went wrong/right and why?â This trading plan is not complete; I will be adding more things to it. Please guys let me know what you think of this plan. Is there anything you would like to add to this? I truly appreciate your support. Thank you
John, This trading plan is very similar to how mine read shortly after I imploded following the 2000 bubble. I can tell you from experience you are on the wrong path. Put the brakes on everything you have running through your mind and start training yourself how to think like a trader. If you can accomplish the "thinking" part of trading the "acting" part becomes sooooooo much easier. Hop on over to Amazon and buy "Trading in the Zone," by Mark Douglas. Read this book until you need a bottle of Visine. You simply cannot trade successfully unless you know how to think like a trader. All the rules and analysis, and study, practice, preparation, etc....won't do you a bit of good until you work on yourself. Trading is all about perception. What is really happening vs. what you perceive is happening is the key to success. You gotta work on yourself before you go to work on the markets. Good Luck!!
John and all who are trying to learn how to trade.....let me ask you a question, and this is a serious question. How far into the future can you see? At first glance your answer will probably be something to the effect of, "I can't predict the future." Agree, but when you learn to develop a "feel" for the market your answer will begin to change. I've been trading for the better part of a decade and when I first started I couldn't see into the future at all. As time went by I developed the ability to look into the future for about 3 or 4 min's. I'm not any kind of fortune teller but I have developed a "feel" for the market that allows me to look into the future, with relative accuracy, by a few min's. So where do you think I take the majority of my profits? Easy answer....my trades typically last a few min's because that's all I'm capable of seeing. I leave runners on all the time but when I win on them it's just dumb luck. They turn on me as often as they run so I trade very light in those situations. It's all about knowing what you are capable of doing, trading big during those times, and trading small otherwise. I typically take a 10 lot, take a quick partial on 1/2 at a point or two, take another partial, and leave 1 contract on as a runner. Sometimes the runner wins, sometimes it doesn't but it all comes out in the wash. Rules like, "Keep tight stops of .10 to .20" and "only trade 300 shares" guarantee you'll always lose. No one can predict the market within 10 or 20 cents. It just can't be done. Work on your trading psychology and money management. When you have solid strategies to deal with both of these you need to begin working on the markets. No one can time the market perfectly to make hard and fast rules useful. Trading is an art.
Thank you for replying. I'm very impresed with what you wrote here. I read it few times and I feel you really know what you are talking about. On your Q how far in the future can you see, the answer for me is not at all Predicting the market is not easy but can be accomplished. If I can predict 4-5 minutes like you do, I think most of my trades would be profitable. I believe what you said is right and I take your advice seriously. I ordered the book Trading in the Zone and I should get it in a few days.
My own experience with Toni's material, for what its worth: Toni is a great teacher and a very good trader (a rare combination) Her course is pretty much the best I have seen (and I have seen and bought a lot of crap ) Her material is solid and logical (and in addition to screen time all you might need) She is a very helpful person Her room is free Her course is - compared to most of the other stuff out there - almost free and offers a money back guarantee The stuff she teaches (and uses) has helped me a lot in turning the corner to profitability If you are going to buy learning materials this might be the best value for money you will find Will it make you profitable right away? Probably not and she will be the first to tell you. But in my experience, if you put in the time and the effort, you will see a lot of improvement over time. Hope this helps. Good luck with your trading!
On your Q how far in the future can you see, the answer for me is not at all-------->>> I hear you. It took me 10 years to get where I'm at and all I can get a read on is a few min's, but how valuable is that? A few min's is a pot of gold. My win rate for the current year is just under 95%. The reason it's so high is because I have a superior money management strategy (i.e. - I don't put my entire line on with 1 trigger) and when the market offers me money I simply take it. I trade the fut's markets for a reason. I know what I'm capable of doing and in the fut's market ticks count. Heck, 1 point on a 5 lot is $250. Gimme 4 of those per day and I'm at $1k. From there I can determine my own success by increasing size. Just find your edge. An edge can be something as small as 1 second. After you read the book you'll have an entirely different view of the markets. It's simply the best trading psychology book on the market. I've read it from cover to cover about 10 times and refer back to it frequently.
Whispers in the ear, "go on, look at all the money there is to be had out there. Just reach out and grab it. It's for the taking...yadda, yadda. It's the devil of a business. Far too easy to get into, like writing. All great writers are self taught, they have never gone on a writing course. They learn through observation, discipline, routine, passionate interest etc. Trading is about cultivating an art. I think it is creative. It has many similarities to music and drama, in other words, a sense of rhythm and flow finding a pattern etc. It is a very human thing. A good trader is closer to a dancer or a musician than a mathematician. There is not a great deal of theory to learn if you want to trade technically intraday. All those who suggest simply watching and paper trading for many months are right. Read a couple of books, sure, but you have to watch and get a feel for the internal dynamics of the thing, understand what is driving it. Try and enjoy it. But when it comes to a business and for real then you must change your whole mindset tot that of a robot. A dancer will appear free but all is worked out beforehand. A musician will play with an emotional expressive freedom but behind her is 20 years of discipline. The upper branches of a tree can blow and dance in the wind but the roots must go deep. Grow your roots, become an artist and save your money.
new traders please read this, and read this again. then go watch the ES or the NQ or whatever, 8 hours day, for 6 months. see if you can predict the next 5 minutes under certain situations. also, refer to my post about spagetti lines. remove all of them, otherwise the 6 months may prolong to be 12 or 24 months.
That is a good question. There are too many losing traders that put on a trade without asking themselves how long the trade should last. While some folks can scalp for 1 or 2 cents with a five minute horizon, others are more comfortable with a longer horizon. On average, my horizon is one full trading day (9.30am to 4pm), or say 12noon one trading day to 12noon the following day. It is when you decide this, you can set other parameters like: how much of a loss can I take? How long should I wait to see a profit? What is my target on the upside? etc.