Day Trading Blog: Trading Plan: Short Stoxx 50 in the morning, Long Nasdaq after US market opens

Saturday, November 6, 2010

Trading Plan: Short Stoxx 50 in the morning, Long Nasdaq after US market opens

From a risk reward stand point it makes more sense to short the Stoxx 50 future in the morning instead of shorting the FDAX. After 9.30 am often times the nasdaq moves much more up than the dax so in the future I try to make more trades in the other markets trading about 3 contracts nasdaq or stoxx 50 instead of 1 dax. I still make long trades in the morning as the dax is my favourite instrument, however most of the times the targets are already reached after the 8.30 am news events so its better to trade other markets/setups (like S&P gap fill)

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Trading Rules:

how to trade profitable? with KSE. knowledge, strategy, execution.
Knowledge: You need to buy low and sell high. So I wait for the price to first go to a prior support level on the daily, 4h, 1h chart.
Strategy: Timing is important so I trade when there is a good setup on the dax, s+p, nasdaq or oil market. My goal is to make few trades with high risk reward, that is archived by either holding a trade till the market closes or reaching a level that sets up a counter trade.
Execution: Usually there is only a 20 point risk involved, so I try to get into a prior support level on the 10 min chart and automatically set a stop and multiple take profit targets.
All the little details how to trade better are listed here but I like to keep it simple: just enter the market at prices with a target that it at least 3 times the initial risk.

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Trade at your own risk. The information provided here is for Education only and is of a general comment only and neither purports nor intends to be, specific trading advice. It has been prepared without regard to any particular person's investment objectives, financial situation and particular needs. Information should not be considered as an offer or enticement to buy, sell or trade. You should seek appropriate advice from your broker, or licensed investment advisor, before taking any action.

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