Why am I trading:
I recognize that Trading and investing in the stock market can provide an opportunity for me to increase my wealth both short and long term. I welcome the challenge, and through: education, consistency & persistence, a specific trading plan, proper mindset and the right tools, I will overcome the challenges and succeed and prosper in the financial trading arena. This will allow me to govern my own path and destiny without having to rely on anyone else for my well-being.
What is my Approach:
My approach for position trades is to take advantage of key reversal locations using a weekly chart time frame. I will be using the ABC 20/200MA method. I will enter using the signal bar, setting a stop and target bracket order. I will trail a stop loss as price moves toward my target.
What are my Goals:
- Monthly – To never let a planned opportunity pass. To follow my trading plan without reservation. To hit singles & doubles, knowing that home-runs will come over time. Above all else, I will be consistent and never take unnecessary risks.
- Yearly – To steadily increase my risk amount when my data tells me it is advisable to do so. To continue learning through my day-to-day activities of being in the market and through continued education. To keep trading business expenses to a minimum. To see a steadily rising equity curve!
- Long Term – To trade for life. I would like to have multiple accounts; One for Income, via Day trading and one for Wealth, via Swing and Position Trading
What are my Objectives:
Being a position trader, I will seek to attain no less than a 50% win percentage, with an overall Profit Ratio of no less than 2.
What Markets will I trade:
My focus will be on the equity (stock) markets.
What Timeframes will I trade:
Weekly chart setups only.
What Setups will I trade:
I will scan for the following two trend setups:
1) Stocks that have an uptrend followed by an ABC counter trend.
2) The countertrend retrace should be at least 50%
3) The 200 MA (200 period simple moving average) needs to be sloping up and the price activity needs to be near the 200MA
4) The 20MA (20 period simple moving average) needs to be near the 200MA and flat or sloping up.
5) The price action needs to have moved higher followed by a smaller ABC retracement.
Entry rules:
Orders can be market order or buy stop limit orders. We need a confirmation move higher after the ABC retracement and any other buy criteria have been met. This confirmation move will execute our buy stop and fill our order. Our confirmation move is a weekly bar that closes higher than the body of the prior week bar.
Bracket orders are to be used at the time the open buy stop limit order is set up. The bracket order will include my stop loss and target orders at the time of entry.
Where will I place my Stops:
My stop-loss prices will always be determined prior to entry, and will be sell stop order. After the stop is activated the order becomes a market order to get me out of the trade. The stop loss can be placed at the low of the signal bar or the most recent low of the ABC pattern.
Exit take profit (and/or) trail-stop rules:
Sell Targets (profit targets) are sell limit orders (my target price or better). I want to get out with a profit at my target price or any price higher than that. I can also sell half at the target and use a trailing stop on the second half to add potential upside profit on a strong stock.
Risk Management rules:
My trade risk will be 1%-1.5% of current daily adjusted trading capital. I have control over position size and stop loss prices to manage this percentage amount at risk.
Pre-market activities, or routine:
Friday or on the weekend review S&P 500 and Nasdaq 100 stocks that meet the entry criteria. I will spend the week adding stocks to a watch list that look close to entry, but need confirmation. On Friday, Saturday, Sunday or Monday Morning, I will find charts will a weekly bar confirmation, which is a weekly bar that closes higher than the body of the prior week bar.
Post-market activities, or routine:
What Tools will I use for my trading business:
- Computer
- TradersPro, Tradingview and webull (charting and broker)
- Mentors
- Advisory or Newsletter services
Review process:
Review the notes and screenshots of each trade 5-8 days after closure and after all biases and emotions have subsided.
Continuing Education:
Read one new trading book a month from my selected group of trading mentors / authors or others of interest. Attend live online classes and other webinar or training resources available. I will not bitch and moan about a method that does not work. My goal is to focus on what I find that works for me.
Discipline & Mindset notes:
I will abide by the (5) Fundamental Truths & Trader Mindset, from author Mark Douglas of Trading in the Zone.
- Anything can happen
- There is a random distribution between wins & losses for any given variable that defines an edge.
- An Edge is nothing more than an indication of a higher probability of one thing happening over another.
- Every moment in the market is unique.
My Golden Rules (and/or) Trading Commandments:
- Be disciplined every day, and in every trade.
- I will be my own trading self, never trading another’s plan.
- I will always take my stop losses.
- I’ll always earn the right to trade bigger.
- I am not addicted to trading just to see what happens.
- I only trade high reward setups that have the probabilities in their favor.
- Be a bricklayer – make the same type of trades over and over again.
- Once I find a setup, I do not hesitate; once in a trade, I do not over analyze.
- A detailed Trading Journal will be kept at all times, and I will act upon what it tells me.
- Everything I do will be for the success of my business.
- Everything I do is my responsibility, I will not complain, bitch, blame for my own actions.