Trading Rules

My trading system is a melting pot of various other traders systems.  I find this to be true with almost every trader, unless they had a specific mentor.  Even then, we all pick up various tips and tricks from other places.  I have learned my system through many books, blogs and a couple mentors.  I trade mostly on price action with the help of simple moving averages, volume and identifying breakout patterns.  Simple is definitely better.  My favorite patterns are bull/bear flags plus rising and falling wedges.  These patterns are simple and very easy to spot on any time frame.  It is my belief is you can make all your money on being an expert at a few simple patterns – with other things such as discipline and psychology in place.

I do use other indicators such as the Stochastic Momentum Index, Fibonacci Retracements and the Volume Weighted MACD to help me with entries, exits and the overall rhythm of a stock.  Below I have listed everything I use to trade both in my analysis and intra-day.  Please do not put much weight into these tools as intra-day they give MANY false trade signals.  I find these tools most helpful when you look at the overall flow of the indicator, not each little cross.

If you have any questions, I’d be happy to answer them for you.  Use the contact form here.

Charts/Time Frames:

Nightly Analysis:
3 Year Weekly
1 Year Daily
20 Day 30 Minute
5 Day 5 Minute

Intraday Trading:
20 Day 30 Minute
15 Day 15 Minute
5 Day 5 Minute
2 Day 1 Minute

Psychological Rules:
I will not chase stocks
I will not see one trade as a means to make up for a previous bad trade
I will keep my trading journal up to date on the blog and in my excel journal
I will not be greedy and will get out when I get that gut feeling
I will let the market show me where it’s headed – no enforcing assumptions
Do not over trade to try and meet weekly goals
No “shoulda, woulda coulda” attitude – look over trade at the end of the day and see how you could have entered or exited better and learn for the next trade

Trading Indicators:
Volume Weighted MACD (longer time frames)
Bollinger Bands
Stochastic Momentum Index
Candlesticks
Volume
Support/Resistance
Breakout/Breakdown Patterns

I will be posting in detail about how I trade in my posts on the main page, but in summary I like to play breakouts based on price action of stocks that are in a confirmed trend.  I will use a long time frame to identify the trend, then a smaller time frame to identify my entry, stop and target price.  Finally I will use a short time frame (usually 5 and 1 minute) to manage my trades once executed.