My Day Trading Rules

This is a discussion on My Day Trading Rules within the General Trading Chat forums, part of the Reception category; Hi, Thought i'd share the way I trade with you all. I have traded this way for a while and ...

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Old Sep 22, 2009, 12:49pm   #1
 
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Joined Oct 2006
My Day Trading Rules

Hi,

Thought i'd share the way I trade with you all. I have traded this way for a while and have been profitable, but only 6 week ago did I decide to write out a set of rules and stick to them religously, and its done my trading a world of good. So here it is.

Would love to hear anyone who trades in a simular way to this. Im not a fan of using indicators. 1 SMA, support and resistance and strict money/risk managment rules are all i feel is needed to be sucessful.

My Day trading System - Forex - 15m charts
LONGS
• Price must be trading above the 200 sma
• Price must not have crossed 200 sma in previous 24 hours of trading
• Entry must be at a significant area of support – 2 touches.
• Stop must be a the next previous significant are of support
• Exit must be at next area of significant resistance
• Distance from entry to exit must be greater then distance from entry to stop (+100% return possible)
• Position size = Max risk (1.5% of account)/pips risked on trade + Spread
e.g £1000/55+2 = 17.54 = £17 per point.

SHORTS
• Price must be trading below the 200 sma
• Price must not have crossed 200 sma in previous 24 hours of trading
• Entry must be at a significant area of resistance – 2 touches.
• Stop must be a the next previous significant are of resistance
• Exit must be at next area of significant support
• Possible Distance from entry to exit must be greater then distance from entry to stop (+100% return possible)
• Position size = Max risk (1.5% of account)/pips risked on trade + Spread
e.g £1000/55+2 = 17.54 = £17 per point.


Today (22.09.2009) this has given me Londs on CHF/JPY - 89.00 and EUR-GBP 0.9055.

This is all forex but im testing this on UK100 shares also. Altough with shares I would add a rule to keep Longs and shorts at a 50/50 ratio

Last edited by ffsear; Sep 22, 2009 at 1:09pm.
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Old Sep 22, 2009, 1:11pm   #2
 
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The 24 hour rule is a good one. Stops you being taken out by sideways markets.
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Old Sep 22, 2009, 1:39pm   #3
 
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Originally Posted by shadowninja View Post
The 24 hour rule is a good one. Stops you being taken out by sideways markets.
Why would it stop you being taken out by sideways markets?
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Old Sep 22, 2009, 1:45pm   #4
 
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Joined Jun 2005
Quote:
Originally Posted by ffsear View Post
Hi,

Thought i'd share the way I trade with you all. I have traded this way for a while and have been profitable, but only 6 week ago did I decide to write out a set of rules and stick to them religously, and its done my trading a world of good. So here it is.

Would love to hear anyone who trades in a simular way to this. Im not a fan of using indicators. 1 SMA, support and resistance and strict money/risk managment rules are all i feel is needed to be sucessful.

My Day trading System - Forex - 15m charts
LONGS
• Price must be trading above the 200 sma
• Price must not have crossed 200 sma in previous 24 hours of trading
• Entry must be at a significant area of support – 2 touches.
• Stop must be a the next previous significant are of support
• Exit must be at next area of significant resistance
• Distance from entry to exit must be greater then distance from entry to stop (+100% return possible)
• Position size = Max risk (1.5% of account)/pips risked on trade + Spread
e.g £1000/55+2 = 17.54 = £17 per point.

SHORTS
• Price must be trading below the 200 sma
• Price must not have crossed 200 sma in previous 24 hours of trading
• Entry must be at a significant area of resistance – 2 touches.
• Stop must be a the next previous significant are of resistance
• Exit must be at next area of significant support
• Possible Distance from entry to exit must be greater then distance from entry to stop (+100% return possible)
• Position size = Max risk (1.5% of account)/pips risked on trade + Spread
e.g £1000/55+2 = 17.54 = £17 per point.


Today (22.09.2009) this has given me Londs on CHF/JPY - 89.00 and EUR-GBP 0.9055.

This is all forex but im testing this on UK100 shares also. Altough with shares I would add a rule to keep Longs and shorts at a 50/50 ratio
Nice & Simple - I've used variations of this and they work.
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Old Sep 22, 2009, 2:16pm   #5
 
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Joined Apr 2009
Quote:
Originally Posted by ffsear View Post
Hi,

Thought i'd share the way I trade with you all. I have traded this way for a while and have been profitable, but only 6 week ago did I decide to write out a set of rules and stick to them religously, and its done my trading a world of good. So here it is.

Would love to hear anyone who trades in a simular way to this. Im not a fan of using indicators. 1 SMA, support and resistance and strict money/risk managment rules are all i feel is needed to be sucessful.

My Day trading System - Forex - 15m charts
LONGS
• Price must be trading above the 200 sma
• Price must not have crossed 200 sma in previous 24 hours of trading
• Entry must be at a significant area of support – 2 touches.
• Stop must be a the next previous significant are of support
• Exit must be at next area of significant resistance
• Distance from entry to exit must be greater then distance from entry to stop (+100% return possible)
• Position size = Max risk (1.5% of account)/pips risked on trade + Spread
e.g £1000/55+2 = 17.54 = £17 per point.

SHORTS
• Price must be trading below the 200 sma
• Price must not have crossed 200 sma in previous 24 hours of trading
• Entry must be at a significant area of resistance – 2 touches.
• Stop must be a the next previous significant are of resistance
• Exit must be at next area of significant support
• Possible Distance from entry to exit must be greater then distance from entry to stop (+100% return possible)
• Position size = Max risk (1.5% of account)/pips risked on trade + Spread
e.g £1000/55+2 = 17.54 = £17 per point.


Today (22.09.2009) this has given me Londs on CHF/JPY - 89.00 and EUR-GBP 0.9055.

This is all forex but im testing this on UK100 shares also. Altough with shares I would add a rule to keep Longs and shorts at a 50/50 ratio
Nice trading rules. This should bring profit if followed without breaking the rules.
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Old Sep 23, 2009, 3:35am   #6
Joined May 2007
Does seem to make sense and having written rules I think is essential for someone who wants to trade seriously.

Just one point though regarding the stop where you say "Stop must be at the next previous significant are of support". To me that may mean giving back too much. I would have thought it more reasonable to have the stop at a point where you are sure that the current support has been breached.

As an aside I wouldn't place any stop exactly at a support level as these levels are quite likely to be tested deliberately to trigger stops.
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Old Sep 23, 2009, 3:38am   #7
Joined May 2007
Oh and one more point is that I would look to develop an entry trigger, ie to look for certain price action that makes a bounce of the support more likely rather than just buying everything eg to enter on or after a bar that makes a washout of the lows before closing higher, or something like that.
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