|
| From The Desk of The Trader |
|
“We are what we repeatedly do. Excellence, then, is not an act, but a habit.”
-- Aristotle [or Will Durant]
|
|
|
FAF19 Day 15 Lesson 14 22 February 2019 |
|
|
Daily Goal: 140 Ticks
Max Contract Size (Per Trade): 7 (Margins $700; acct balance over $4900) -- Made a mistake on this today... Acct balance would have allowed me to be at 9 contracts... and thus DG of 180 ticks.
Performance: 271 Ticks on 77 Contracts.
Summary: Not bad performance for a day that I was uncertain about whether or not I would trade.
Recap Video: Click here.
|
|
Today’s Trading Lesson: Day Trading Basics -- Your First Simple Day Trading Strategy
|
|
In this lesson it's time to give you what may be your first day trading strategy. I know this works because I traded it... and because I still use an advanced version of something like this in my day trading of the ES (mini S&P 500).
A couple of caveats... - Like all the best trading, this strategy is simple... but that doesn't mean it's easy.
- This strategy is designed to help you begin building a small account into a large account... organically... i.e., by compounding and not by adding additional funds
- The most important number in any trade is the stop loss (where you close the trade if it's NOT working). Use them... EVERY failed trader in history failed because of an inability to accept small losses as part of the gig.
- Traders in my trading room have the advantage of using my proprietary TAOST Bias Zone... traded properly, this setup is still profitable... but a bit less so.
- The key is execution... A TAOST Principle is "HOW you trade is more important than WHAT you trade."
Got it? Ok... so here we go.
A buy setup: - $ Management: trade smallest size possible that allows you to achieve objective (Daily Goal)
- Context: 15 minute Trend is up (use Support & Resistance or moving averages)
- Setup: Use a 3 minute MACD Histogram cross of the 0 line in the direction of the 15 minute trend.
- Enter 1 contract with a 10 tick stop and a 25 tick target (risking $50 for a potential $125 reward)...
- If stopped out you can reenter on a trade back up to the original entry price
- This setup has a historical positive expectancy (return for every dollar risked) all the way down to a 30% win rate.
|
|
YM 15 Minute Chart -- Price is clearly trending higher (making higher highs and higher lows) on this chart. |
|
|
YM 3 Minute Chart -- In this instance the trade setup would have worked on the first try. |
|
|
And that's it... See? Not fancy at all.
By doing just this... repeatedly, you could watch your account climb in an accelerated way over time. |
|
|
