Archive for category: Trading Plan

Capital Preservation: 10 Trading Tips

21 Nov
November 21, 2014

 

As a trader, your #1 goal is to keep your current trading capital safe and secure. Your goal as a a trader is to make money and not lose money. Many new traders lose their trading capital in the first year, but these ten tips will help you keep your capital intact so you can make it grow.

  1. Do not start trading until you have fully educated yourself. Trading tuition is expensive when you trade first and learn later.
  2. Do not trade an account so small that commissions will end up being a big drag on your returns.
  3. Do not trade until you have a well developed trading plan.
  4. Trade a position size that does not cause your emotions to become so loud you can’t hear your trading plan.
  5. Only trade in markets you fully understand.
  6. Only take valid entry signals and do not chase. Let your entry point trigger first.
  7. Only trade in liquid markets so bid/ask spreads do not devour your account.
  8. Never risk losing more than 1% of your total trading capital on any one trade through proper position sizing, and by placing stop losses at the correct price levels.
  9. Never expose your total trading account to more than a 3% loss of total trading capital at any one time, on one day.
  10. Never move a stop loss. Take the exit the first time it is triggered.

The NewTraderU Newsletter Signup

20 Nov
November 20, 2014

 

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3 Trades Explained $DIA $IWM $SPY

17 Nov
November 17, 2014

 

Trade #1

  1. I shorted $IWM three days ago by buying $TZA at $13.02 when $IWM was near the 70 RSI on the daily chart.
  2. My stop loss was to exit if $IWM closed above the 72 RSI.
  3. My trailing stop is to stay short unless $IWM closes above the previous day’s high.
  4. There is a potential that the 5 day ema acts as intra-day resistance.
  5. It is possible that $IWM goes to the 50 RSI or the 200 day moving average.
  6. I am currently up 6% on the capital at risk in this trade.

Trade #2

  1. I went short $DIA today by purchasing $SDOW at $21.67 as the $DIA chart was near a 72 RSI.
  2. My stop is a close above all time highs.
  3. If $DIA begins to pull back and the trade goes in my favor, I will use an end of day stop of a close above the 5 day ema.
  4. $174 is my potential first target.

Trade #3

  1. I sold $204 $SPY weekly calls for $1.20 and bought $207 weekly $SPY calls for .10 cents to create a $1.10 bearish credit spread when $SPY was near its 70 RSI. 
  2. If $SPY closes below $204 on Friday I will make $550.00 with the five contracts. This is a small trade for my account sizes.
  3. My stop loss to exit this trade is if $SPY closes over the 72 RSI on any day before expiration.

$SPY Chart With 10 Facts 11/16/14

16 Nov
November 16, 2014
 chart courtesy of stockcharts.com
  1. The long term up trend is still in place.
  2. All indexes are with-in striking distance of all time highs which remains bullish. $SPY $QQQ $IWM $DIA
  3. With all stock indexes pushing against the 70 RSI on the daily chart the potential upside is very limited putting the odds on limited momentum taking us to higher prices from here.
  4. $SPY has been in a $203 support $205 resistance price range for the past 5 days.
  5. In the past five days the 5 day ema has stopped being the intra-day support.
  6. The next line of support on the $SPY chart is the 10 day sma then the $200 price level.
  7. The risk/reward ratio here has skewed in favor of short selling  plays and call option sellers.
  8. All Time New Highs
  9. Chart Your Trade Weekly Report
  10. All-Time Highs Possible In Bear Markets

5 Links to Great Trading Rules

30 Oct
October 30, 2014

 

 
Trading Rules From A Professional Trader: Richard Weissman

20 Golden Rules For Traders by Alan Farley

Dan Zanger’s 10 Golden Rules

The Art of Trading: Golden Rules. From @TraderStewie

Dennis Gartman’s 22 Rules of Trading

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