After a couple of years of looking for the holy grail, moving from stocks, to forex, to futures, making money, loosing money, making money again, reading books, taking courses, being in chat rooms, trying different indicators and setups, trading from newsletters, etc I feel I finally had an 'ahah' moment of keeping things simple and just strive to being consistent - slow but steady.
I admit, in all books, every single course and chat room this has been said, but I guess I was never listening or just not applying it. I was just concentrating on looking for the system that will make me money and not really giving time to work or even worst, giving myself time to understand that the system was just trying to teach me price action.
Every trading system I came across I tried to automate it (software engineer as my day job), and after I proved it did not work, I moved on to the next. On these systems, what I was missing is the context and current price action. I am sure if I took the time for each system again and dedicated learning it within context they all work, which brings me to the conclusion that what really matters is understanding the markets.
Luckily, at the time of this enlightenment I came across this site which emphasizes my new way of seeing the business: keep it simple, be consistent, disciplined and treat this business like a business and not like a hobby.
This is where I think that by forcing myself to keep a journal at futures.io (formerly BMT) will force myself to be more disciplined.
So here is my current trading plan:
Charts:
Chart 1: Market Profile Chart
Gives big picture of balance areas
Draw balance areas before the market starts
Chart 2: 5 Range Chart
Horizontal lines:
Balances areas lines
Globex high and low
Purpose:
Can act as S/R
Can give a where too target
KC (Keltner Channel)
Purpose:
Trade to and from MC (mid Keltner Channel)
Can give a where to target (outer KC, MC)
VWAP
Purpose:
Can act as S/R
Can give a where to target
DeltaVolume
Purpose:
Look for change of direction at S/R areas
Chart 3: 5 Range Chart
(Same as above but in Ladder mode)
This chart is exactly the same as Chart 2, zoomed in using volume ladder, so I can see details of the immediate bars.
KC - same as Chart 2
VWAP - same as Chart 2
GomCD - visual representation of delta (and cum. delta)
Volume Ladder Mode
Purpose:
More detailed info on the bar for signs of change of direction around S/R
Money Management:
Contracts:
1 ES contract in sim mode
Once 500 P/L sim is reached, will move to 1 contract (real money)
Once 500 P/L is reached, will add 1 contract
Once 1000 P/L is reached, will add 1 contract
Will keep adding one contract for every 3000 P/L
For each 500 lost, will remove 1 contract
Until -500. At this point will have to start again with sim
Right now I will be trying all in all out, will reconsider once using multiple contracts.
I understand this might sound very aggressive, but I firmly believe that if I force myself to real money quickly, the real learning of myself will be greater as sim trading does not carry the same pressure as real money. This also puts pressure on sim trading and on live trading, while having in place a way to preserve capital. Additionally, it simplifies when to sim trade, live trade and when to add contracts.
Target: Minimum 8 tick (to accommodate 1:1 ratio)
Target will be placed ahead of next S/R. A trade will not be entered unless there is enough room for an 8 tick target before reaching the next S/R area.
Stop: Maximum 8 tick
The initial stop will be placed at 8 ticks, but through reading the volume ladder chart, will determine if the trade is not going immediately my way. I will not practice the model of leaving stops alone, instead once I determine the trade is not going my way via the volume ladder, I will attempt to …