My Daytrading Plan

Q

Quanto

My Daytrading Plan

Just planning.

What do you think of this daytrading plan?
How to improve it?
What about disabling step 8.2 (the stoploss step)? :D
Code: 
My (preliminary) Daytrading Plan:

1) Strategy : Daytrading the same 1 stock
2) Direction: Long-only
3) Define MaxRisk%
4) Define Trailing StopLimit% (TSL%)
5) Define Target%
6) Find the right stock for daytrading
7) Protect downside with a Protective LongPut option (DTE about 5 days or shorter)
8) Daytrade the stock (multiple times if possible)
  8.1) Use Target% for exiting with a profit
  8.2) Use TSL% for exiting with a profit or loss
  8.3) Closing the stock position before market closes is optional :-) (since we are insured / protected --> see step 7)
9) Stop daytrading 1h before the option expires, and instead close the option if necessary, otherwise let it auto-expire. Close the stock position.
See also my related prev. posting.

daytrading.jpg
 
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2) Direction: Long-only
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Your day trading plan is horrific!!!!
You should focus on Investing and not trading.

You wanted to trade Long-only direction.
When the chart says uptrend, you'd take a long position.
When the chart says downtrend, your mind has been wired to think it is on the uptrend.

You have to learn when to press
BUY button first, and when to press
SELL button first.
 
Hey @maxinger, FYI: it's a plan for daytrading... not swing-trading or long-term trading... not investing..., but speculation.
It's similar to scalping, but target here in this plan is normally higher.
I think you missed the whole point of this thread... :)
It says "Daytrading Plan", not "Trading Plan" :)
 
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horrible plan.

1. Why would you make money, who is gonna pay you?
2. Why would you limit yourself to only one stock?
3. Why would you limit yourself to long only?

Your number 6 is probably the only valid point to focus here
 
Folks you have to analyse the microstructure of the intraday stock price movements.
For example one can trade a stock that swings intraday say 5 cents, up and down...
The art is to repeat the "successful trading process" as often as possible... ie. applying scalping..
The cheaper such a stock is, the better, IMO (of course must be liquid (must have a good intraday volume)).
B/c then the Put premium (the cost for the said protective insurance) will be cheaper as well,
for example just $0.10 (x 100 = $10 per contract) for DTE <= 5.
This would mean that one can realize a MaxRisk less than 1%:
LongPut: S=10, DTE=5, K=S=10 (ATM), Premium=0.10:
0.10 / (10 + 0.10) * 100 = 0.99%
 
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I do not think that trading plan is good

1.What should a 1 put options at the money *50 Delta* 5 DTE for example help.

2.Asume that you at least buys round lots 100 shares or more and maybe scale in and out!

3.You also says close the trade before the market close *daytrading* , but day trade the same stock untile 1 hr before the options expire *On the 5th day*.

4. Maybe the stock have gained 20 % or fallen x% in the 5 days. That is making your HEDGE even more bad

5. It is maybe not good only to trade the on stock you have picked and *HEDGE* from the long side for 5 days until your *HEGDE* expire.

6. *You says the cheaper the stock is the better* Why maybe you can not use margin, or maybe the cheap stock got halted. Driffent orderbook rules etc.
 
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MrMuppet said:
horrible plan.
1. Why would you make money, who is gonna pay you?
2. Why would you limit yourself to only one stock?
3. Why would you limit yourself to long only?
More...
It seems you don't understand the role of the said LongPut in the plan (step 7).
I have no clue what you mean with your #1.
The goal is to fully concentrate just on this one stock only (at least for the next 5 days or so), not hopping from stock to stock.
 
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Quanto said:
But it is! See steps 4 and 8.2: uses a trailing stop loss%.
As asked in the OP, this step is maybe even unnecessary or redundant :)
More...
I don't trade options or day trade for that matter.
The devil is in the details. Now you have to put specifics to everything that says "Define"
I know you can trade stocks for zero commission are options also free? You have to consider the trading costs along with the spread when scalping for pennies
 
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