Wednesday, March 18, 2009

Present Trading Plan

Since I have had trouble the last few days with entering positions that do not fit my criteria to the tee, I wanted to explicitly note my current trading plan, so that I know from now on exactly what plan I will follow until repetitive experience teaches me otherwise. The current state of the plan--as I commit to following it--is:

MY TRADING PLAN
  • I run screens on Yahoo! Finance between 9:50 and 10AM to find very weak/strong stocks, i.e. > 3% off open.
  • I trade from 10:10 - 11:45AM.
  • I place trades off 5-min charts.
  • I take only Floor Trader Method setups, such that:
  1. Pullback pierces Bollinger Band
  2. I enter on a break of the piercing bar
  3. Pullback is on decreasing or constant volatility
  4. At least one of the EMAs is rising
An example of a Floor Trader Method setup.

  • I move my stop to breakeven when price advances 2X entry setup.
  • I exit my entire position on breaks of levels formed on 2-minute chart if stop has been moved to breakeven (Home Run exit). See an example.
  • I risk a fixed amount of equity per trade.

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