Trading Plan
My Trading Plan
Money and Trade Management
Losses:
Never lose more than my average days gain.
RESPECT MY MAX LOSS.
RECOGNIZE BAD DAYS AND STOP AT MAX LOSS.
YOU CAN NOT MAKE MONEY EVERY DAY.
CONTROL ANGER, GREED, FOMO.
Step Away after a losing trade.
Stop when losing 3 trades in a row.
Stop trading when I say I’m done for the day.
Discipline is your best friend!
Risk:
Mondays start with ½ share size or ½ stop size.
Increase to normal size only if you’re winning.
The day after a losing day start with ½ share size or ½ stop loss.
Increase to normal size only if you’re winning.
Use the same Stop Loss dollar amount for every trade by adjusting share size.
Use 1:1 Risk Reward Ratio and the 50% Rule.
If a daily profit goal is exceeded you may spend up to %25 of the excess profit towards trying to increase profit.
Stops & Profit:
Use mental stops when possible.
Never move a correctly placed stop.
Stop out quick and get back in later if warranted.
Take a minimum 1/2 position profit at the first pause or reversal area near or out outside the 1:1 ratio zone.
Take profit by stop out of 1/4 position outside the 9 ema.
Take profit by stop out of last 1/4 of position outside the 20 sma.
Trading Guidelines
Waiting:
Wait a Minimum of 5 Minutes to start Trading.
Waiting 8-10 minutes is best.
Wait for a Pattern to form.
No Trading after 11:30 AM.
Direction:
Only Trade in Direction of Spy.
Only Trade in Direction of 20 sma.
Trade with the Stocks trend only.
20 sma:
Entering near the 20 sma is best.
Taking profit far away from the 20 sma is best.
Long above the 20 sma & VWAP, short below is best.
Be aware of Wide States and do not enter.
Wide state: stock is far away from 20 sma, 20 far away from VWAP, stop trading or reverse.
No 3rd Wave Trades, these would be far away from the 20 sma.
Trades:
No Trading after 11:30 AM.
Trade Shallow Cups only, Double Cups, NRBC Breaks, Wedges, & Channels only.
No shorting tops or up trends until a second failure at or near 11 AM..
Remove afterthoughts & trade the plan.
Adjust share size before entry to maximum trade loss based on technical stop.
MAX 2 trades at once.
Watch the 9 ema for entry.
Don’t anticipate, Gap Up or Gap Down does not matter, trade the current pattern.
Gaps must move in the opposite direction before a trade.
This is usually covered by waiting at least 10 minutes.
Trade the Stock, not the SPY.
Add if it trends in your favor.
Optimal range is trading $7 to $65 Stocks.
Support & Resistance from Pre-market is the key.
Volume, 80k minimum on 1 minute candles.
Any move must pull back 50% before entry or consolidate an equal length to the move.
After a trade zoom out and analyze the stock before reentry.
Enter on 1st or 2nd legs only (no 3rd leg entries).
On a break, one green candle followed by red is weakness.
Entering at 9/20 cross, at channel lines, or NRBC near the 20 sma is best.
Avoid entering at consolidation, enter outside NRBC.
Healthy moves should not be pulling back and breaking their large igniting bars.
Exhaustion: use the three move rule and the length + Speed of each move to determine if exhaustion is near.
A large Bar rejected more than 50% is probable direction change or failure (void during first 5 min).
NOTES:
Making the right decision matters more than winning or losing money.
83% of all losing trades are trades going against the 20 SMA.
On extremely volatile days trade smaller stocks.
On flat days trade larger stocks.
My winners are hiding in my losers, find the common denominator in my losses (calling tops, trading before 9:40).
Use the fear of losing to limit my share size.
Remember the feeling of losing and use that to enforce discipline on myself.
Ego, Anger, FOMO and Greed are account killers!
Mentally add a zero to my P/L each trade to take it more seriously.
Stocks: 3 letters probably NYSE. 4 letters probably Nasdaq.