Trading Rules

హలో Padutrader,

In your previous incarnation last week as TraderGOD you were a 1 minute man, now a 5 and 30 minute man. No problem, it doesn't really matter. I think what Electric Savant is suggesting is that whatever time frame you ultimately settle on or whatever indicators you choose to use, simply test that from the time of your entry point/signal there is a greater MFE than MAE.

Doing this is a good preliminary test for trading system development. From that point you can do further testing to see if either fixed time or volume increments from the entry signal confirm the positive MFE/MAE ratio.
 
Chuck Krug said:
Trading Rules


Basic strategy is to trade around a bias. Bias forms short, mid, and long term. We’re mainly focused short term. For short term trades, we’re looking for trades that we’d be comfortable holding overnight. If not, we work to get an average we’re comfortable with (these are major/minor pivots i post)


Forming a bias

  • What's the underlying story/ market dynamics / risk on or off
  • Where is the risk
  • How significant is the risk
  • What's the price action/tempo like
  • Calendar events/catalysts/risks
  • How are others positioned. Risk on/off?, offsides?, crowds?, HFs, etc
  • Any sentiment reads

Types of trades


  • Positioning for swing (what price/size are you comfortable holding overnight)
  • Intraday - scalps 1:1 (hit and run action, till we get to major/minor levels)

Positioning for swing - Setups based on levels and time.

  1. Major - pivots for bias or theo avgs.
  2. Minor - levels provided daily overnight. Used to improve theo avgs/ around major
  3. daytrades/scalps - can be used to improve avg but r/r is 1:1 usually

Intraday scalps -

  1. Better when Intraday range less than expected range, else trend scenario
  2. How extended are we from vwap (globex and day)
  3. What's the profile/structure type.. Trend day vs Ranged?
  4. Ranged - use minor levels - #2 above
  5. Trend Day - use intraday setups #3 above
  6. How are deltas (bid/ask)
  7. What are vols doing.. Also underlying vols. Vol can be hidden in one stock/sector that can cause mkt moves.

Tools

  • Theo worksheet:

Money Management

  • Patience for trades
  • Hit the trades you really like HARD (learn your probabilities, note, they can change)
  • Trade in rhythm, step back when not in sync.
  • Avoid big draw downs.
  • Adapt as needed

Other

  • Stay happy, not stressed
  • Have a life outside of desk, explore
  • Workout hard, golf, walk etc.. something daily. Sun, sweat, etc
  • Read
  • Keep in touch with influencers you like.
  • Learn from others outside of your wheelhouse


Note: these are not mine but from https://twitter.com/vader7x But I thought they could help some fellow traders or at least start an interesting discussion.
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You’re not looking hard enough.
 
On a day like today (SPX down 50pts, -1.7%, VOL popping from 14-ish at Friday close, to breach 20.00), it's important to note that the "rules" posted in the OP lack any specifics for position/risk/money management. They are long on entries, and way short on exits. It's pretty typical, but still sad to see. If we're grading, I'd give it an "F".

:(
 
deaddog said:
The market is never wrong. Regardless of your bias the market will move in the direction it wants. Better to trades based on what the market is doing rather than what you believe it should be doing.
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Correct, which is why we don't make money by "beating the market", we make money by agreeing with the market...by being in synch with it.
 
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