Time to get Trading Rules into Place

[KGTrader4]

1. trade only ETFs, sector, industry and index
2. Do not open positions in any ETF in a down trend
3. Never Open a position under the 50 and 200 day EMA
4. Never open a position when the 50 day is below the 200 day EMA
5. Risk no more than 2% of total capital on 1 position
6. Have no more than 10% of total capital at risk at any one time
7. Limit loss on any one position to 8%

Not sure about strategy , i.e., what i should be looking for in a setup Thinking breakouts, but not sure. So thinking that way but wont make it a formal rule yet.


TO BE CONTINUED......

 

[BKR88]

1. trade only ETFs, sector, industry and index
2. Do not open positions in any ETF in a down trend
3. Never Open a position under the 50 and 200 day EMA
4. Never open a position when the 50 day is below the 200 day EMA
5. Risk no more than 2% of total capital on 1 position
6. Have no more than 10% of total capital at risk at any one time
7. Limit loss on any one position to 8%

Not sure about strategy , i.e., what i should be looking for in a setup Thinking breakouts, but not sure. So thinking that way but wont make it a formal rule yet.


TO BE CONTINUED......

Rules 3 & 4 could be viewed quickly with a ribbon indicator.
***Rules 3 & 4 eliminate the need for rule 2 IMO.
***Rule 6 not needed IMO. Why keep 90% of your account in cash? Keep ___% available for investment opportunities. Your "8%" rule protects the account.

 

[tomkat22]

Cool.Where do you plan on taking profit on a position? Up 10%? 20%? Use a trailing stop? Scale out?

 

[KGTrader4]

Rules 3 & 4 could be viewed quickly with a ribbon indicator.
***Rules 3 & 4 eliminate the need for rule 2 IMO.
***Rule 6 not needed IMO. Why keep 90% of your account in cash? Keep ___% available for investment opportunities. Your "8%" rule protects the account.

View attachment 285859

Thanks for the feedback. i don’t think I have the ability to add ribbon indicators on Think or Swim, but I’ll check. But even without, it’s easy enough as I have the EMA’s on my charts as default.
Re 10% I think you misunderstand, when I say max 10% of capital at risk, I mean total of max losses on all positions can’t be more than 10%
Maybe that doesn’t work out, I should look at it, I didn’t do the math. If not I’ll adjust

 

[KGTrader4]

Cool.Where do you plan on taking profit on a position? Up 10%? 20%? Use a trailing stop? Scale out?

Trailing stops and scale out. I have found I don’t love hard initial targets. Since I’ll probably focus on position trading I’d want to let profits run

 

[easymon1]

Thanks for the feedback. i don’t think I have the ability to add ribbon indicators on Think or Swim, but I’ll check. But even without, it’s easy enough as I have the EMA’s on my charts as default.
Re 10% I think you misunderstand, when I say max 10% of capital at risk, I mean total of max losses on all positions can’t be more than 10%
Maybe that doesn’t work out, I should look at it, I didn’t do the math. If not I’ll adjust

Here's a tool that might be useful to get or to look at if you put one together in a spreadsheet.

https://www.elitetrader.com/et/thre...t-right-here-baby.335635/page-25#post-5549800

 

[KGTrader4]

Here's a tool that might be useful to get or to look at if you put one together in a spreadsheet.
View attachment 285862
https://www.elitetrader.com/et/thre...t-right-here-baby.335635/page-25#post-5549800

Thanks easymon. I found this….. https://chartyourtrade.com/position-size-calculator/

 

[SunTrader]

8. Read a good book or two or three or four (who knows how many) if market continues downtrend rest of year.

Since it appears the rules above don't allow for going short.

 

[KGTrader4]

8. Read a good book or two or three or four (who knows how many) if market continues downtrend rest of year.

Since it appears the rules above don't allow for going short.

Nah I don’t short. Just not my thing. Being a non professional trader I have the luxury of just sitting on my hands when necessary. something I find hard to do but know I need to work on

 

[SunTrader]

Sitting on hands, not going short, hard time following your rules .... that would be a non trader, professional or otherwise. Just sayin'