5 RULES - NEVER BREAK THEM
1) No bias, system only
2) Don't go heavy, 2U max
3) Never average down on weekly/DT
4) Trail out, don't let green go red
5) Set a stop loss and respect it
1 explained - Don't succumb to preconceived bias for a given session. Use the 10/50 30min SPX System to set bias instead.
- 10SMA over 50SMA is BULLISH.
- 50SMA over 10SMA is BEARISH.
- Price crossing 50SMA signals change in direction in the short term. Get out of a position if it's against this trend.
- 10SMA crossing 50SMA confirms this short term change in direction.
- 50SMA must ALSO be headed in the direction of the shift for final confirmation. Just the cross is not good enough.
- When price is in between the 10/50SMA OR when the 10/50 cross occurs WITHOUT the 50SMA directional confirmation, EXPECT CHOP.
2 explained -Don't utilize too much buying power for a single position. This will help to limit losses and keep from blowing an account.
- Remember, the majority of your losses are coming from positions that are TOO HEAVY and held TOO LONG.
- Respect your risk and size properly.
- 2U maximum position, no exceptions.
- 1U maximum for swing.
- .5U HARD STOP.
- 1U = 10% of portfolio value.
3 explained - Never average down on a weekly contract. ALWAYS CUT INSTEAD.
- IT DOESN'T MATTER IF YOU SOMETIMES GET LUCKY AND GET BAILED OUT BY THE AVG DOWN. IT WILL BITE YOU IN THE ASS.
- ALWAYS CUT INSTEAD. REVISIT THE TRADE IF NEEDED BUT DO NOT AVERAGE DOWN.
4 explained - Trail out, don't let green go red.
- Once you see 20% profit, DO NOT LET THAT TRADE GO RED.
- Trail out if holding multiples, beginning around 15% profit.
5 explained - Set a stop loss and respect it.
- A huge reason you're blowing your accounts is poor risk management.
- ALWAYS TRADE WITH A STOP LOSS. .5U HARD STOP + CHART STOP i.e. PM Level shift.
- REMEMBER WHY YOU MESS UP. NO STOP LOSS + AVERAGE DOWN + EMOTIONS THAT WON'T LET YOU BE WRONG.
2) Don't go heavy, 2U max
3) Never average down on weekly/DT
4) Trail out, don't let green go red
5) Set a stop loss and respect it
1 explained - Don't succumb to preconceived bias for a given session. Use the 10/50 30min SPX System to set bias instead.
- 10SMA over 50SMA is BULLISH.
- 50SMA over 10SMA is BEARISH.
- Price crossing 50SMA signals change in direction in the short term. Get out of a position if it's against this trend.
- 10SMA crossing 50SMA confirms this short term change in direction.
- 50SMA must ALSO be headed in the direction of the shift for final confirmation. Just the cross is not good enough.
- When price is in between the 10/50SMA OR when the 10/50 cross occurs WITHOUT the 50SMA directional confirmation, EXPECT CHOP.
2 explained -Don't utilize too much buying power for a single position. This will help to limit losses and keep from blowing an account.
- Remember, the majority of your losses are coming from positions that are TOO HEAVY and held TOO LONG.
- Respect your risk and size properly.
- 2U maximum position, no exceptions.
- 1U maximum for swing.
- .5U HARD STOP.
- 1U = 10% of portfolio value.
3 explained - Never average down on a weekly contract. ALWAYS CUT INSTEAD.
- IT DOESN'T MATTER IF YOU SOMETIMES GET LUCKY AND GET BAILED OUT BY THE AVG DOWN. IT WILL BITE YOU IN THE ASS.
- ALWAYS CUT INSTEAD. REVISIT THE TRADE IF NEEDED BUT DO NOT AVERAGE DOWN.
4 explained - Trail out, don't let green go red.
- Once you see 20% profit, DO NOT LET THAT TRADE GO RED.
- Trail out if holding multiples, beginning around 15% profit.
5 explained - Set a stop loss and respect it.
- A huge reason you're blowing your accounts is poor risk management.
- ALWAYS TRADE WITH A STOP LOSS. .5U HARD STOP + CHART STOP i.e. PM Level shift.
- REMEMBER WHY YOU MESS UP. NO STOP LOSS + AVERAGE DOWN + EMOTIONS THAT WON'T LET YOU BE WRONG.
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