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.