A Sample Trading Plan

Jeff Quinto has a video on the CME website on how to setup a trading plan.
Here are the key topics Jeff suggests and my answers:

Which contract or stock will I trade?

I'm trading stocks and futures.

What time period will I trade?

I trade the first 3 hours of market open primarily, while liquidity is best.

What setups will I take?

I discretionary trade the automated signals I have created. I determine if the current market condition suites any trade signals my system generates and then I choose whether or not to take the trade.

What Risk parameters do I use?

I have a max daily stop loss in place in case I make too many bad trades.

What do I do after 3 losing trades?

I determine if I should stop trading based on if I'm feeling frustrated or if I should keep trading my signals until my daily max loss is reached.

What is my strategy for increasing or decreasing my trading size?

I trade 1-2 contracts for the initial position and only add to winners on clear trending trades (market internals heavily favor bulls/bears -ie TICK and NYSE A/D favor bulls/bears).

How many ticks or points am I trying to make per day?

I don't have a set target, I only take what I can get.

How many trades do I make per day?

I only make 3 to 5 trades per day on average. Most trading days only make 3 significant swings, so my primary goal is to be apart of the primary move or catch a reversal swing or continuation trade.

How long do I plan to hold winners or losers?

I hold winners as long as possible, scaling out as I see fit. I hold losers for as long as I need to as long as my stop is not hit.

How do I record my progress?

I keep a journal of my trades with trade statistics and a chart showing where I placed my trades.

Who do I call if my computer or internet has a problem?

I have stops in place for all my trades so I'm covered, however I can also access my account from my phone or call my broker.

A Sample Trading Plan

Jeff Quinto has a video on the CME website on how to setup a trading plan.
Here are the key topics Jeff suggests and my answers:

Which contract or stock will I trade?

I'm trading stocks and futures.

What time period will I trade?

I trade the first 3 hours of market open primarily, while liquidity is best.

What setups will I take?

I discretionary trade the automated signals I have created. I determine if the current market condition suites any trade signals my system generates and then I choose whether or not to take the trade.

What Risk parameters do I use?

I have a max daily stop loss in place in case I make too many bad trades.

What do I do after 3 losing trades?

I determine if I should stop trading based on if I'm feeling frustrated or if I should keep trading my signals until my daily max loss is reached.

What is my strategy for increasing or decreasing my trading size?

I trade 1-2 contracts for the initial position and only add to winners on clear trending trades (market internals heavily favor bulls/bears -ie TICK and NYSE A/D favor bulls/bears).

How many ticks or points am I trying to make per day?

I don't have a set target, I only take what I can get.

How many trades do I make per day?

I only make 3 to 5 trades per day on average. Most trading days only make 3 significant swings, so my primary goal is to be apart of the primary move or catch a reversal swing or continuation trade.

How long do I plan to hold winners or losers?

I hold winners as long as possible, scaling out as I see fit. I hold losers for as long as I need to as long as my stop is not hit.

How do I record my progress?

I keep a journal of my trades with trade statistics and a chart showing where I placed my trades.

Who do I call if my computer or internet has a problem?

I have stops in place for all my trades so I'm covered, however I can also access my account from my phone or call my broker.

Traders Education

I've put together some of my favorite links to past posts that may help traders.

Reflection on a bad day

Drilling for trading perfection

Top Ten Trading Mistakes

What does it take to be a successful trader - By Lord Tedders

The Holy Grail Setup - By Trader Stewie

Overnight Hold Trade Setup by Trader Stewie

Linda Rascke's Holy Grail Setup

Jeff Quinto on when to Press Trades

Dr.Steenbarger's observations of failing Traders

Denial as a Trading Motivation from TraderFeed

Dr.Steenbargers most devastating loss

Traders Education

I've put together some of my favorite links to past posts that may help traders.

Reflection on a bad day

Drilling for trading perfection

Top Ten Trading Mistakes

What does it take to be a successful trader - By Lord Tedders

The Holy Grail Setup - By Trader Stewie

Overnight Hold Trade Setup by Trader Stewie

Linda Rascke's Holy Grail Setup

Jeff Quinto on when to Press Trades

Dr.Steenbarger's observations of failing Traders

Denial as a Trading Motivation from TraderFeed

Dr.Steenbargers most devastating loss

April 23 Trade Summary

I used the NYSE A/D and NYSE TICK to leverage myself into a short setup that was my big winner for the day. My goal is to find one good setup per day where I can use increased size with a profit target of 0.7-1.4 pts when trading ER2.

P/L= $402

This weekend I reviewed some of my recordings and noticed some good things that will help me in my trading. I noticed that I'm missing out on making more money because my trading execution platform was limiting my abilities. I have been trading from the basic IB order entry page, which is a really slow way to make trades if your looking to make your money by scalping. I was watching some of my videos and some of the ninja trader instruction videos and realized that I'm missing a lot of trade signals by not having a trading execution system that is fast enough to take my trades. So, today I started trading from IB's Book Trader, which with a single click, will execute my trade within a second. I missed about 3 scalp trades this morning from being to greedy in waiting for my entry to get hit. I was trying to sell the ask when the price was on the bid, and buy the bid when the price was on the ask. With time I should get better.

SCALPING-
My motivation to start scalping more is from reading an old chat transcript posted over at Linda's Rascke's website. The chat transrcipt was an interview with trading coach Jeff Quinto from Photon Trading. He said that he tells his new traders to make many scalp trades and to look for 3-6 ticks as a profit target and to stratch the majority of trades. Doing this will give the trader more exposure and experience in the markets and should help that trader in their execution skills. This is also something that Dr. Steenbarger; from TraderFeed, talks about in his new book "Enhancing Trader Performance". The chat talked about when you should PRESS trades, by adding to winning core positions, and that he never adds to losers. If he has a loser he cuts it, because something has happened that he didn't expect and he doesn't know why, so he exits the losing trade. I also like how he went over the time frame he holds his trades. He said that he holds winners for an average of 6-7 minutes and 3 minutes for losing trades. This is interesting because my winning trades normally last 3-6minutes, and my losing trades normally last longer than 3min, sometimes 15min from averaging into the loser, so this is something I need to work on. I need to start looking to cut my losers as soon as they are a few ticks against me, or after 3minutes when scalping. To checkout the chat transript checkout Linda Raschke's website.

Here is my new monitor setup showing Book Trader for ER2 and YM along with all my other charts that I use to trade with.





Market Observations-

I missed the big move in ZN, I saw the setup and didn't take it. I was skeptical because there was light volume between 7:30-7:40am, and I was expecting a pullback, but it never happened and the trend continued. O'well, at least I'm getting better at my intraday analysis on ZN. I guess I should have gone long on JPY if I was afraid of the higher risk trading ZN.



Tommorow should be interesting with these key #'s out tommorow:

07:45 ICSC-UBS Store Sales
08:55 Redbook
09:00 Bank of Canada Announcement
10:00 Consumer Confidence
10:00 Existing Home Sales
01:00 5-Year TIPS Auction
01:00 4-Week Bill Auction

The weather out here in Cali is looking beautiful, so I'm going to enjoy it. Have a good day ya'll.