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    Trading Rules

    Uploaded by

    AM405
    The document provides trading rules for entering and exiting positions with a focus on discipline, risk management, and technical analysis. Key points include: - Entering trades based on other ideas and one's own analysis, with profit targets of 3:1 and max risk of 1% of account. Positions are scaled in using 1/4 sizes. - Exiting when lower lows are formed, after two losing trades by reducing size, and scaling out at 5%, 10%, 15% profit levels. Stops are moved up throughout the trade. - The "84% rule" of resubmitting the same entry if stopped out on a good setup, as it should work 84% of the time

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Trading Rules

    Uploaded by

    AM405
    263 views2 pages
    The document provides trading rules for entering and exiting positions with a focus on discipline, risk management, and technical analysis. Key points include: - Entering trades based on other ideas and one's own analysis, with profit targets of 3:1 and max risk of 1% of account. Positions are scaled in using 1/4 sizes. - Exiting when lower lows are formed, after two losing trades by reducing size, and scaling out at 5%, 10%, 15% profit levels. Stops are moved up throughout the trade. - The "84% rule" of resubmitting the same entry if stopped out on a good setup, as it should work 84% of the time

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    The document provides trading rules for entering and exiting positions with a focus on discipline, risk management, and technical analysis. Key points include: - Entering trades based on other ideas and one's own analysis, with profit targets of 3:1 and max risk of 1% of account. Positions are scaled in using 1/4 sizes. - Exiting when lower lows are formed, after two losing trades by reducing size, and scaling out at 5%, 10%, 15% profit levels. Stops are moved up throughout the trade. - The "84% rule" of resubmitting the same entry if stopped out on a good setup, as it should work 84% of the time

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    263 views2 pages

    Trading Rules

    Uploaded by

    AM405
    The document provides trading rules for entering and exiting positions with a focus on discipline, risk management, and technical analysis. Key points include: - Entering trades based on other ideas and one's own analysis, with profit targets of 3:1 and max risk of 1% of account. Positions are scaled in using 1/4 sizes. - Exiting when lower lows are formed, after two losing trades by reducing size, and scaling out at 5%, 10%, 15% profit levels. Stops are moved up throughout the trade. - The "84% rule" of resubmitting the same entry if stopped out on a good setup, as it should work 84% of the time

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Trading Rules

    “If someone else can do it, so can you.”


    Discipline = Always following rules

    General Rules:
    - Entering a Trade
    o Use other people’s trade ideas as confirmation with my own thoughts, not based only on their trade
    o Profit margin: 3:1 or greater
    o Max risk: 1% of account or 10% of ticker price
    o Scale in using 1/4ths of position size
    o Never play backside of trade (except using demand zone)
     When using demand zones, use half size, then add rest after a higher low
    - Exiting a Trade
    o Cut after lower lows
    o After two Loses, size down half until two wins
    o Scale out at 5%, 10%, 15%, then the rest rides until VPA shows weakness
     May need to exit whole position early based on VPA/vol. (low vol. highs/high vol. selling)
     “If things are so bullish, why are there all these wicks?”
     Consistent singles > homeruns
    o Never hold through earnings/news
    o Never let a winner turn to a loser (move stop up throughout the trade)
     Thought: better to be stopped out for a profit than ride backside of the trade down
    - 84% Rule
    o On a good setup, if stopped out, submit the exact same entry/stop again
    o If activated again, the trade should work 84% of the time the second time
     Thought: good trade, wrong time
    - Technical Analysis
    o HL/HH’s vs. LH/LL’s
    o Trend lines
    o Supply/demand
    o Support/resistance (round up to whole numbers if close)
    o Volume (breakout vol. used to determine low volume pullbacks and VPA selling pressure)
    o Patterns (flags, pennants, double tops/bottoms, head and shoulders/inverse H&S)
    - Supply/Demand
    o Use descending bids for entering a demand zone
    o Never use zone blindly, use VPA and look for patterns around these zones to form
    o Look for consolidation zones after a trend line break or at turning points
    o Mark swing high/lows at major trend changes
    o When zones are stacked, closer ones may be ignored so use farthest zone
    o Odds enhancers:
    1. How strong was the move away from creation zone (gap or LDC best)
    2. How many candles did it take to make zone (at least under six)
    3. How far did price move away from zone (determines potential reward)
     Use “novice zone” to help create price target, don’t trade near “novice zone” (middle of
    chart)
    4. How fresh is the level (don’t trade after first 25% of zone is used)
     Check smaller timeframe to determine if zone was left and filled at creation point
    Evening Routine:
    - Chart plays from the day to determine what I should have done/what I failed to see and upload to discord
    o Write why trade worked/didn’t work
    o Journal my emotions/thoughts throughout the trade
    - Update charts on watch list
    Swing Trades:
    - Technical Analysis
    o Check on monthly/weekly/daily/hourly
    - EMA Clouds
    o Entering a Trade
     Only enter on strong move above 34/50 (except when using demand zone)
     Use 8/9 or 5/13 for pullbacks
    o Exiting a Trade
     Scale out when extended from 5/13 cloud
     Cut trade under 34/50 on hourly
    - Golden Rule for IPO’s
    o Opening day high/low are key pivot points creating a range (or 10min candle for intraday or
    weekly/monthly for longer term)
    o Long/short when breaking out of range
    o Use a resistance level in range as stop
    - Scanning
    o All time low hammers with volume
    o High volume tickers (breaking above 34/50 on daily/hourly
    Day Trades:
    - Pre-Market
    o Determine gappers/chart them
     Mark pre-market high/low
     Weekly/daily resistance levels for price targets (3:1)
     Look at 5m:5d chart
     Locate support/resistance, HH/HL or LL/LH, reoccurring patterns, fibs 50-62% bounce
     Potential dip areas to enter with confluence? (increasingly smaller red candles w low
    vol.)

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