Day Trading Blog: Trading Plan: Comparing Instruments

Saturday, July 2, 2011

Trading Plan: Comparing Instruments

Looking at barcharts Opinion (summary of technical indicators) gives a clear trade plan what to trade:

Previous Opinion = Todays Opinion = No Trade but watching for setups
Previous Opinion > Todays Opinion = Go LONG
Previous Opinion > Todays Opinion = Go SHORT

If the opinion changes during the day new setups occur but looking at the end of day prices usually give a good overview what might happen during the day.

In the screenshots above from 1st of July 2011 its was clear to sell Gold as the Sell Opinion increased and to short the Pound as it was the most bearish

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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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By reading this Blog, you acknowledge and accept that all trading decisions are your own sole responsibility, and I cannot be held responsible for any losses that are incurred as a result.

There is risk of loss in trading and investing. All trade decisions are your own sole responsibility.