Tuesday, July 4, 2017

MY Trading Plan

Why am I trading:

Trading is a reflection of ourselves.  We must look in the mirror and find our flaws and plan for them.  

What is my Approach:

My beginning approach is to take advantage of power moves  by using using the daily for entires and the weekly charts to determine early trends and bases:
  • I will trade in the most powerful stocks as they breakout out of early base from stage 2;
  • I Will trade IPOs;
  • I will trade toddlers as they make new highs.

What are my Goals:

  • Daily — To be prepared.  To have my watch list formed and to trade from my watch list.  
  • Weekly— To perform broad market and sector analysis, review trades from that weekly.
  • Monthly – To never let a ‘planned’ opportunity pass. To follow my trading plan without reservation. Stay consistent!
  • * Yearly – To steadily increase my risk amount when my data tells me it is advisable to do so. To continue learning through my day-to-day activities of being in the market and through continued education. To keep trading business expenses to a minimum. To see a steadily rising equity curve!
* Long Term – To make enough from trading to become financially independent. 

What are my Objectives:

  1. To trade in the best stocks at the times when they offer the lowest risk entry. I will only trade in stocks that are capable of making 20-50+ moves when they advance. 
  1. To ride the trade when they offer the possibility to do so.(This will depend on the broad market)
  2. To be out of the market when it is not advantageous to be in the market. 

Performance Goals:

Performance metrics, I will seek to attain no less than a 45% win percentage, with an overall Profit Ratio of no less than 1.5.  120% a year. 

What Markets will I trade:

I will focus only on stocks, options may be used for longer term trades or higher priced stocks but they will not become a critical component until I can prove I can successfully trade them.

MACRO and Market Considerations

Reign in expectations when market turns to “Chop zone” as determined by guppy chart on ADV/DEcline (t2108) 

Market M monitor =+50% > 20.
Tighten Stops and reduce holding time and be careful 

Setups will I trade:
  • Week 1 breakout — 

  • Slingshots
This is a pull back setup.  Ideal entry is after a 10-15% pull back on the re-capture of the Thrust indicator.  The First Slingshot is more prone to failure than a secondary one when volume comes out.

  • Fishhooks
This is power.  Fishhook + RCTF

  • IPOs
IPOs give me an edge.  I track them all. Most don't or won't .  I have the confidence built up by looking 100s of IPO charts spanning over a 1/2 decade.   I feel I have a good Idea of what will work and what won't that I can exploit.

a. Reclaim the Fame

b. Capture the flag
C. move out of first dip:

Entry rules:
Positions should be taken when triggered.  Enter with limit orders on ask.  Use 5x6ema setup if stock has broken out. 

On a slingshot volume is not as crucial as on a W1 / BO

Pre-plan entries for top watches and enter with buy stop.

Where will I place my Stops:
My stop-loss prices will always be 
determined prior to entry, and will be at logical major-pivot locations on the chart that I’m trading from.

Exit take profit (and/or) trail-stop rules:

Half profit will be taken nearing a predetermined point of support/resistance, which must represent a 3:1 reward/risk ratio or 15%.  Final profits will be taken after a confirmation of the end of the current trend (from chart of entry), or at blow off reversal after trending.

Risk Management rules:

My trade risk (1R) will be up to 2% of current (daily adjusted) trading capital.



Pre-market activities, or routine:

6:30 a.m.— check overnight positions (news etc) take actions on sucker gaps. 
6:35 — meditate while coffee is being made off
7:—8:20 get kids ready for school, work etc..

8:30 - watch initial actions.   potentially take action

Check news, pre-market quotes

Post-market activities, or routine:

Update trade Journal spreadsheet. Post blog for trade journal Review all open trades for possible next day action. Review any closed trades to determine whether plan was followed (or not).

If Plan not followed— Punishment by Dollar Jar.

What Tools will I use for my trading business:
  • Tc2K
  • Interactive Brokers 
  • Google Sheets
  • nextbigtrade.com — Seriously a fantastic free tool.

  • Review process:
Review the notes and screenshots of each trade 5-8 days after closure and after all biases and emotions have subsided. Write notes in the journal sections of the trade journal as to how future trade executions, management and exits can be improved. Bi-weekly, check spreadsheet sheet to see what sub-categories are producing positive expectancy (with frequency). Modify ‘plan’ according to updated information.

Discipline & Mindset notes:
I will abide by the (5) Fundamental Truths & “Trader” Mindset, from author Mark Douglas of “Trading in the Zone”.

1 “Anything” can happen
2 I don’t need to know what is going to happen next in order to make money.
3 There is a random distribution between wins & losses for any given variable that defines an edge.
4 An Edge is nothing more than an indication of a higher probability of one thing happening over another.
5 Every moment in the market is unique.

My Golden Rules (and/or) Trading Commandments:
1 I will be disciplined every day, and in every trade.
2 I will be my own trading “self”, never trading another’s plan.
3 I love taking small losses.
4 I will always earn the right to trade bigger.
5 I am not addicted to trading just to see what happens.
6 I will only trade high reward setups that have the probabilities in their favor.
7 I will be a bricklayer – making the same type of trades over and over again.
8 Once I find a setup, I do not hesitate; once in a trade, I do not over analyze.
9 I will always keep a detailed trading log/journal and will act upon what it tells me.

10 Everything I do will be for the success of my business!

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