Hello Everyone,
I’ve been trading very seriously for the past 2 months, before that I was part time. And I would love to get some professional feedback on my trading rules list.
Any comments on what to add or remove or even consider would be great as I really want to create a full-time career out of trading.
Thanks in advance!
Day Trading Rules
Use Support/Resistance (S/R) and Chart Patterns for entry, exit, escape (3 E’s), and only take trades following trend
Must know my 3 E’s before making the trade.
The biggest risk I’m willing to take is 1% of my capital. This means from my entry to my Stop Loss (SL) it cannot pass 1%. (On Average it is $150 or 30 pips)
My SL will be at the next S/R line from where I’m trading. My SL will move to the next S/R once a S/R is broken. Also my SL will go to breakeven once I hit 15 pips.
My max size will be 5 mini lots
The play must always allow 15 pips for breakeven.
Trades happen on the 1hr chart. Overall trends will be found on the 4hr and 1D charts
Don’t force trade, Don’t add to a losing position, Don’t touch a trade after going in unless it is to move the SL to lock in profits
Let winners ride and losses stop out.
Follow trend. If uptrend then trade support bounce and resistance break, and bull patterns. If downtrend trade opposite.
It very nice and if you follow this it should work. Just one thing I would change: It’s about the way you’re determining the trend.
First consider having a look at higher Tfs. They will give you places of support ans resistance where you may look for trend reversal. Then you enter on a good signal. Fro instance look today at AJ daily. that was a bearish trend. But do you see that doji at the bottom?
Using those charts will tell you what level you should look after and where to expect reversal. When you get a signal at those level, you may enter with more confidence, even if lower Tfs tell you it is against the trend.
Second, you need to decide whether you wish to check the trend from the daily or from the H4. for instance in a bearish daily trend you will have consolidation period that will look like a bullish trend on H4. Then what will be the trend for you? If you are trading from H1, I would consider looking for the trend on H4, an using also daily to find supporrt and resistance where reversal may occur.
@Wind, if the system is delivering results according to your expectations then I would advise you continue using it. Nonetheless, you could still test it for more profits and see what you could tweak without affecting the current results. And finally, you should always remain open for change. Market can always cause surprises and does not entertain rigidness.
Great read as someone who is just starting out. Thanks for your post.
One thing I don’t understand is you mentioned you max loss being $150 OR 30pips, and you mentioned your lot size.
As a newbie, maybe you or someone else can explain for me, how does the lot size matter? If you calculate the amount your willing to lose should lot size or pips matter?
For example I went live today, and my normal risk reward is going to be 2:1 (although this may change). However today, I have gone in on the eur usd following its slump, with a SL of 25 pips and I’ve left the TP open as I think it may go up a reasonable amount tomorrow and I can watch it. So, I calculated my SL to be 2% of my capital based on 25 pips. So the lot size is irrelevant?
I’m a newbie trader as well. To give answer to your statement, doesn’t it sound to greedy if you dont set a TP…?
I hope an experienced trader can give you a more substantiated answer.
