Sunday, June 7, 2015

Who Are You?

Recently I was asked, "who are you?" by a veteran trader.  Not in a derogatory way but in a way for me to look inside myself and try to determine who I am as a trader.  It was in response to a post I made earlier in the week concerning my mid-week struggles.  Another question he asked is if I had a journal or a blog that I could go back to and figure out who I am.  So I mentioned in my last blog that I went back to my blog and found my way back rather quickly.  But, the question he asked me first has been eating away at me all weekend.  I'm sitting here watching NASCAR, as I usually do all weekend.  If there is a Camping Work truck race and an Xfinity race during the weekend, I am there. It's really a good weekend if there is a drag race on TV as well.  But I just couldn't get that question out of my mind.  So, I decided to put my thoughts together in a blog so that I can have a quick reference guide to go to in case I forget who I am as a trader again.

It's good that I have reminders that guru's have shared posted on my desk but how do I directly relate them to me. What are my thoughts concerning these rules and common mistakes that new traders make and how they relate to me. How do I define myself as a trader?

Well, first and foremost, I am an "Average Joe" hence the screen name I chose.  I am a long biased trader.  Now that may change over time but this mindset has brought me to this point.  My big loss last week was on a short that ran away from me quick and I didn't have a plan for that.  Should have had my stop in, went in with a smaller size, plus other things I didn't do right. So if I had a set of "rules" specific to me, what would they be?  I figured I should work on some and these should be posted as well so I won't get lost in a stupid trade that doesn't go with my style.

Intra-day Trading Rules

1.  Focus only on the best setups that I am familiar and consistently profitable with.

2.  I need to make sure I have a plan for each trade before I enter any trade. I have to have a defined entry and exit strategy and a defined stop.

3.  Keep my plan simple.

4.  Use the price action, volume, RSI, and VWAP to establish my plan for the trade

5.  Make sure the trade is definitely a quality setup.

6.  Never get emotional in a trade.  If I do, I'm in with too much size or I do not have a solid plan that I understand

7.  Never follow anyone else into a trade.  Never! Always make sure I vet every ticker I trade.

8.  Losses are good if I learn from them.  Focus more on my losses and failed trades

9.  Cut losses quickly. Use position size correctly to establish correct R/R:  At least 2:1

10.  Be prepared to improvise, adapt, and overcome in the changing markets.

Quick Reverence Guide
1.  My Setups
     - 15 Minute Opening Range Breakout - Pre-market gappers
     - 15 Minute Opening Range Breakdown - Pre-market gappers
     - Bottom Reversals
     - Top Reversals
     Sub or Secondary Setups - Patterns I normally look for after I have traded the initial move
     -Trades off of the VWAP (above for longs and below for shorts)
     - ABCD set-ups for long trades - typically a secondary move for my pre-market gappers.
     - Gearing and perking to break key resistance areas, HOD, R/G moves

2.  Best time of the day for me to make profits is 9:30 to 12 so that's the time for me to be aggressive.  Later in the day will need to make sure the setups I trade are solid and take profits quickly.

3.  Make sure I know where the SPY is trading.  If it's trading below the VWAP, take caution on long trades.  If trading above take caution on trades to the short side.

My setups are simple so I do not need a lot of indicators to help me trade.  I like to get in and get out as fast at the trade allows.  As I develop as a trader, I will swing more and take trades with plans of holding for longer time frames.


  1. Wow, Ed. You continue to impress! Congratulations on your "new" job! It must feel very empowering!

    Maybe that guy's remark was a backhanded compliment. You know, like "who are you to be killing it in this game?" :)

    Again, thanks so much for laying so much of what you're doing right out there so plainly for all to learn from. I have yet to have the time to study it all in any depth that will help me get to a point where I can answer that question myself, but it won't be long now, and I am determined to get there! Thanks for the inspiration, and happy trading trails to you!

  2. Lol! Maybe it was a backhand! Thanks and as always thanks for your awesome comments!

  3. Good post Ed. I'm impressed by your drive. Jim

  4. Hi Ed
    My name is Jens. I am German. I am also a trading student.
    Would love to chat with you sometime.
    My Skype is "reisem",
    I mostly trade parabolics / reversals, studied investorslive, BOWS and lincolnlist teachings.
    Let´s connect via skype.

    Thanks for your blog. It is valuable.