Trading Strategy

I originally learned how to do full documentation of my trades in 2005. It's now 2008. I had these bracket trading sheets that helped get me in and out of trades. In a market that is not volatile, this was okay for me. But, when things started to get pretty volatile late last summer, I found myself being whipsawed out of many positions -- positions that were profitable, then having to take costs in them, or they were highly profitable to either break even or take so little off the table.

It was rather frustrating. My trading coach at the time is a wonderful coach, who is also my friend. He has a great deal of knowledge and has done very well for himself. He is, however, not a daytrader. I had always heard all these horror stories about daytrading and sure, with anything if you don't understand what you're doing and do not execute properly, you can get your head handed to you on a platter.

After being whipsawed numerous times in my real accounts, and after recommendation by my trading coach, he said I should consider daytrading. My technical trading skills and disciplines were good. I gave it a try and found success, good success. I was far more profitable and actually daytrading in volatile markets helped calm me. The swing trading made me very nervous and not holding positions overnight helped give me more peace of mind.

However, as things have heated up in my divorce and my work needed in my divorce has ramped up, and also my children needing more of me, it has made daytrading also a challenge. Unlike in swing trading, attentive focus RIGHT NOW was not always necessary. I could put my contingent orders in and let them fill. With daytrading, I had to babysit my trades pretty much the whole time if I wanted the best entries and exits.

While daytrading suits my personality much better, due to extenuating circumstances, it's made it also costly for me because the focus isn't always there. There are many distractions right now and that does not lend itself to good trading. And, I've found I've mixed my emotions and other things into my trading, which is a NO NO!!!

In April, I took on a new trading coach whose style is pretty different. I've been learning more in depth as to the WHY'S of things, and now have a much deeper understanding, well, at least just brushing the tip of the iceberg in understanding and knowledge. It is very exciting.

The past couple weeks, I've not gotten very far with my trading plan, well, haven't gotten anywhere. But, there are always going to be distractions and I had to get moving. I had to have a better way to manage my emotions. We all have emotions and it's not reasonable to say you're going to get rid of them, but you can control them.

This evening, I spent 4.5 hrs writing down specifically ONE strategy for entry and exit for both in the bullish and bearish directions. I tested it on AAPL over the past few months and it's working pretty well. It allows me much cleaner entries & exits, though. I will use this strategy on options and futures trading to rebuild my accounts.

Once they are at a better level (my accounts), I'm going to add some interim steps that will get me into trades a little earlier and exit also at a more optimal level, with smaller pullbacks/reversals. What that means is if the move is $30, my strategy will allow me to take about $24 of it, which is still excellent, but the revised strategy will allow me to be like $28 instead. That extra $4 means a bit more risk, so it would be when getting in earlier you start with a smaller position and add to it and the confirmed entry.

For exits, it would be getting out as things take a breathing, but you would be scaling out of the trade. You would get completely out of the trade once all your signals are confirmed that things are reversing.

Honestly, I'm not sure I would really share exactly what my trading strategy is, but I may give hints here and there and let you develop your own strategy. This is a free blog, and I have been sharing a lot of information that has cost me many thousands of dollars to learn either through the school of hard knocks, through paid classes/DVDs/books, through coaching, etc.

I don't mind sharing ideas periodically or helping provide some insights and guidance, but what may work for me, may not work for another person.

Anyway, I'm excited that my Strategy is fully written out in words, giving me very precise signals to take. It mechanizes my system exactly. So, let's put my money where my mouth is and see what happens in the next few weeks.
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