Trading Plan – rules, scaling plan, expectations, checklist and strategy.
Important rules to live by:
- Capital and account preservation is most important.
- Consistent risk management and sticking to trading rules critical to success.
- A loosing trade if handled correctly can be the best trade of the day.
- Process is king, consistency on trading process and staying on plan will lead to long term profitability.
- Trade only if you understand current sentiment and overall market conditions.
- There is always another trading day round the corner.
- Focus on one good trade at a time.
- All you need is one good trade per day, search, plan and execute that trade everyday.
- Read this document everyday before trading and before every planned trade.
- Must complete daily trading plan, strategy and setups before trading.
- Before entering a trade, must run through trade entry checklist (below).
- Stops may never be widened once trade is placed, early exits are aloud.
- Follow scaling plan, no deviation.
- 3 consecutive loosing trades within one trading day – stop trading.
- Negative 5% on the day, stop trading and move to sim.
- 3 consecutive down days – move to sim for 1 day
- Negative finish on the week – move to sim until confidence returns.
- Do not revenge trade, do not overtrade, stick to rules.
Account scaling plan, position limits and stops:
- Outright position risk limit is 2% of account.
- Spread position risk limits is 3% of account.
Position sizes may vary, contract limits may increase or decrease depending on overall account balance.
- Currencies: 6E, 6B, RP, 6A, 6C, 6S, 6J, 6M
- Fixed Income: ZT, ZF, ZN, ZB, UB – ICS Spreads FYT, NOB, BOB/BUB
- Metals: GC
- Energy: CL & 12 month calendar spreads (ex CL Dec17: -CL Dec18)
- Indices: ES, NQ, YM, RTY, NKD, DAX, FESX
- Is this area where market participants are likely to move the market and actively show interest?
- Are you with market direction and current sentiment are we with the current trend?
- Define the trade setup and strategy (Classic, Aggressive, Breakout, Reversal or Range)
- What are the correlated markets doing, is there confirmation in at least one other market?
- Check session time, is there enough volume during the current session?
- Check calendar, news and data release schedule is free.
- If you are trading data, do you know what is expected vs previous, do you understand the data?
- Does this trade meet the minimum risk/reward of 1:2?
- Is the stop placement and position size within risk parameters?
- How likely is the trade to hit predefined targets?
- How long are you willing to let the trade play out in minutes or hours?
- Are you sure and willing to put on risk for this trade, in your mind grade the trade already?
- Press record for trade screen capture recording.
- PLACE TRADE.
In trade management:
- Monitor order flow.
- Monitor correlated markets.
- Monitor news flow, ransquawk, tweetdeck and bloomberg.
- Derisk trade as soon as possible (first target, stop to scratch).
- Allow trade time to play out, allow minimum amount of allocated time for trade as per trade plan.
- Take profit if its within 1 or two ticks of the target, get green on the screen.
Post trade management:
- Stop trade recording.
- Complete post trade analysis, review and write-up.
- Publish trade video and review write up to blog and you tube channel.
- 2-3 trades per day on average.
- Average positive day: + 5% on account
- Exceptional positive day: + 9% on account
- Average negative day: – 2% on account
Disclaimer: There is substantial risk in trading. A loss incurred in connection with futures trading can be significant. Target Alpha Trading makes no claims whatsoever regarding passed or future performance. Any Strategy is for educational purposes only.