Throughout the years I have been making a living swing trading.. now its time to give daytrading an honest try.
I decided to post this journal because this is where I struggle most and any help would be welcome. I want to document my progress and I know many traders here at Elite are in the same shoes. I enjoy reading others commentary and insight which only can benefit my trading.
Strategy:
I am using Esignal and IB Broker. I will be looking at the 10 min chart only. My strategy is to simply play trendline breaks throughout the day. No indicators, no moving averages.. nothing except for price and volume.
The reason I chose the 10 min bars is because I dont want to trade too frequently (less is better).. and the 10 min bars are not noisy where I would be headfaked all day long.
I will be trading the SPY only because it allows me to properly scale out for profit.. I am not big enough to scale out of futures (yet). I will be basing my charts off the SPY, ES and $SPX. SPY chart is a bit too noisy though.
I think for support resistance and trendline the $SPX is the cleanest.. but the ES updates tick by tick instantly.. whereas and the $SPX can take many seconds to update the chart.
Entry:
Simple trendline break. Trend line is defined by connecting highs or lows of atleast 3 bars for the duration of atleast about 6 bars ( one hour) .. the more the better.
When breaking the trendline market must make higher higher or lower lower from the previous bar.
Avoid trendline breaks that offer poor risk to reward... meaning market should not be be too far extendef from pivot high/low as it attempts to break the trendline.
Place market order when entering immediately as the trendline is broken.
Exit:
Losers-
Place stop above or below breakout bar.. or 2 bar high/low if not enough room is given. Deciding between whether to use a 1 or 2 bar stop loss is a bit discretionary but its common sense. If stop is still very tight allow for .5 to 1 point under/over the 2 bar high/low. The point is to try to avoid getting stopped out because stop was too tight.. as opposed to controlling your loss.
Winners-
Here is what I believe seperates the winners from the losers. Taking and protecting profits is where I place all of my emphasis on. I will start trading with 300 share SPY positions. This allows me to scale out 3 times in 100 share increments.
Here is where discretion is applied. As soon as I am in a profit of atleast 1 point or greater on ES chart.. or .10 on SPY chart... I will exit first increment of SPY.
When my profit is greater than my initial risk.. I will exit my 2nd lot. And the third lot will be trailed discretionally.
As soon as I have a profit and unload my first lot I will reduce my intial stop loss slightly above break even.. and After I unload my 2nd lot... the stop becomes breakeven on the remainder.
In order to make it simple.. I do not use limit orders for anything.. just market orders.... but this type of trading (market orders only) can be dangerous for those that can not deal with taking losses.
--MIKE
I decided to post this journal because this is where I struggle most and any help would be welcome. I want to document my progress and I know many traders here at Elite are in the same shoes. I enjoy reading others commentary and insight which only can benefit my trading.
Strategy:
I am using Esignal and IB Broker. I will be looking at the 10 min chart only. My strategy is to simply play trendline breaks throughout the day. No indicators, no moving averages.. nothing except for price and volume.
The reason I chose the 10 min bars is because I dont want to trade too frequently (less is better).. and the 10 min bars are not noisy where I would be headfaked all day long.
I will be trading the SPY only because it allows me to properly scale out for profit.. I am not big enough to scale out of futures (yet). I will be basing my charts off the SPY, ES and $SPX. SPY chart is a bit too noisy though.
I think for support resistance and trendline the $SPX is the cleanest.. but the ES updates tick by tick instantly.. whereas and the $SPX can take many seconds to update the chart.
Entry:
Simple trendline break. Trend line is defined by connecting highs or lows of atleast 3 bars for the duration of atleast about 6 bars ( one hour) .. the more the better.
When breaking the trendline market must make higher higher or lower lower from the previous bar.
Avoid trendline breaks that offer poor risk to reward... meaning market should not be be too far extendef from pivot high/low as it attempts to break the trendline.
Place market order when entering immediately as the trendline is broken.
Exit:
Losers-
Place stop above or below breakout bar.. or 2 bar high/low if not enough room is given. Deciding between whether to use a 1 or 2 bar stop loss is a bit discretionary but its common sense. If stop is still very tight allow for .5 to 1 point under/over the 2 bar high/low. The point is to try to avoid getting stopped out because stop was too tight.. as opposed to controlling your loss.
Winners-
Here is what I believe seperates the winners from the losers. Taking and protecting profits is where I place all of my emphasis on. I will start trading with 300 share SPY positions. This allows me to scale out 3 times in 100 share increments.
Here is where discretion is applied. As soon as I am in a profit of atleast 1 point or greater on ES chart.. or .10 on SPY chart... I will exit first increment of SPY.
When my profit is greater than my initial risk.. I will exit my 2nd lot. And the third lot will be trailed discretionally.
As soon as I have a profit and unload my first lot I will reduce my intial stop loss slightly above break even.. and After I unload my 2nd lot... the stop becomes breakeven on the remainder.
In order to make it simple.. I do not use limit orders for anything.. just market orders.... but this type of trading (market orders only) can be dangerous for those that can not deal with taking losses.
--MIKE
