"An expert is a man who has made all the mistakes which can be made, in a narrow field."

- Niels Henrik David Bohr

Wednesday, June 23, 2010

Practice plan - Step 2. The trading process; Part 3: Determine the required trigger behavior (Summary - revisited)

This is the re-visited version, I changed the exit strategy per yesterday's discussion. Helps to have my thoughts laid out and as simplified (yes/no) as possible. This defines my edge.

Determine the required trade triggers


The Finger

Entry: Is the available price close enough to the stop? Does the market support the expected direction?

Exit: Is the stock still moving in the expected direction?
  • Have the candles changed size (from larger candles to smaller candles)?
  • Has the candle closed on the opposite side of the 7-period EMA?
  • Is this the largest candle of the day? Has it retraced more than a third of the way?


The Outbreak

Prior to Entry (alert setting): Does the stock show clear lines of support or resistance?

Entry: Is the entry price close enough to the stop? Does the market support the expected direction?

Exit: Is the stock still moving in the expected direction?
  • Have the candles changed size (from larger candles to smaller candles)?
  • Has the candle closed on the opposite side of the 7-period EMA?
  • Is this the largest candle of the day? Has it retraced more than a third of the way?




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