Saturday, September 24, 2016

Trading Plan: No 50% entries anymore if the prior movement was not at least 50 ticks

Since the method to enter at 50% retracements generates to much (unprofitable entries) I going to restrict the entry method to movements with a minimum of 50 ticks:

Reversal: 
Wait for the market to get to support (prior day low) or resistance level (prior day high)
On support :
  • wait for the market to go up 50 ticks, then down 50% of that up movement then enter long
  • if the market does not retrace 50% or you missed the entry, go long above a close of the first swing high

On resistance:
  • wait for the market to go down 50 ticks, then up50% of that down movement then enter short
  • if the market does not retrace 50% or you missed the entry, go short below a close of the first swing low
Trend Continuation:
Market trades inside prior days range (is not near prior days low or high) or at the open outside prior days range or fails to generate entry signals for a reversal trade, I am looking for entries at intradays highs and lows.

On support :
  • enter with a limit order at prior low
  • if you missed the entry or did not get filled, go long at a pullback or on the breakout (close above) of an range

On resistance:
  • enter with a limit order at prior high
  • if you missed the entry or did not get filled, go short at a pullback or on the breakout (close below) of an range
Example: From 9 am to 11.30 am no trend happend: no entry was possible with the 50 ticks rule, so either set an alarm if the breakout happens or simply enter at a prior high below prior days close and wait.


No comments:

Post a Comment