Rule of 10 Journal

J

jagmot

I'm bored of all the critics of Rule of 10...so I'm going to papertrade Rule of 10 to show it can be traded on a profitable basis. For journal/papertrading purposes, I will be using 1 contract.

Here are the rules I am going to use when trading

1 contract (so obviously no scaling out)
3 pt stop
10 pt target
No trailing stop (either target is hit or stopped out at initial 3 pt stop)
If stopped out twice in a row, done for the day and will wait till next day before entering a new order.

Today's high is 1291.75
Market is currently at 1281.75
Long 1 contract at 1281.75
Target 1291.75
Stop 1278.75
 
I googled 'rule of 10' and 'rule of 10 in trading' but did not see any links to the strategy or 'rules' that you are trading. Could you explain how it works? For example, how do you identify Point 0?
 
Quote from SWhiting:

I googled 'rule of 10' and 'rule of 10 in trading' but did not see any links to the strategy or 'rules' that you are trading. Could you explain how it works? For example, how do you identify Point 0?
More...

Thank you for the post. The rule starts at a reaction high or low. For purposes of this journal, I am starting with today's chart. Please see attachment.

Here is how you would setup the trade in advance

The last reaction high was 1291.75 (also happens to be today's high but it meaningless for the trade setup). Place a buy limit at 1281.75. You should then be able to setup the software to enter your stop 3 pts and your target 1291.75 if your buy limit gets executed (in case you are away from the computer).

Looking at today's chart you could also setup a short at the last reaction low of 1286.25. You would setup the short at 1296.25. Once we crossed below 1286.25 earlier tonight that reaction low would have been invalid (and never got exectued)

It will probably become more familiar in the next few weeks as trades are posted.
 

Attachments

Quote from brownsfan019:

Should be interesting since the rule of 10 is mentioned in the ES journal.
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Thank you for the interest.

Too much (critisicism?) unfortunately. I'm hoping this journal will help put an end to it...or at least be a reference for people. My plan is to papertrade (I trade differently with my own money using RSI diveregence on a few time frames and also option premium writing) until the end of the calendar year. At the end of the year, we will see how the evaluation is going and go from there.

We will see how the trading goes as I know V trades much differently with scaling out, trailing stops, etc. His method is too hard to emulate in a journal setting...only in a live trading room.
 
Quote from jagmot:

Thank you for the post. The rule starts at a reaction high or low. For purposes of this journal, I am starting with today's chart.
More...

I guess the one thing that might need clarification is the 'reaction' points.

Glancing at the chart, here's how I would have seen today based on the rule of 10 premise:

2z8agjm.png



Circles = possible reaction areas
Arrows = where actual trades could have taken place

For today, 8/6/08, I personally saw 2 possible short trades = one failure and one winner. Depending on entries and exits, the day could be a scratch if out at MOC or better if held overnight.

Would you agree jagmot?
 
Quote from brownsfan019:

I guess the one thing that might need clarification is the 'reaction' points.

Glancing at the chart, here's how I would have seen today based on the rule of 10 premise:

2z8agjm.png



Circles = possible reaction areas
Arrows = where actual trades could have taken place

Based on my view of today, I see 2 possible shorts - 1 failed, 1 worked = +7 on day.

Not bad for 2 trades.

Would you agree jagmot?
More...

I agree. Just for journal purposes though, I'm going to start the journal with the first live trade above rather than the 2 that we look back on today. Otherwise I fear that the thread won't serve its purpose (and chief complaint) of non live calls. I'm going to do my best to post setups ahead of time since I obviously can't post 24 hours a day.
 
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