January 28, 2011

Stops and Targets Trade Management Day Trading Futures

–          Stops and Targets
o    What type of trader are you?
o    Scalper = always use the same stop and first two targets
o    6-10 tick stop
o    Target = +5/+10/Runner
o    Day Trader = stops and targets can be the same, but often they are different
o    10-20 tick stop
o    I can also use standard 10 tick stop or 20 tick stop, but make sure you use standard targets too.
o    I can also use support and resistance in the market im trading.
o    Targets = +10/+20/Runner
o    Swing Trader = stops and targets will ALWAYS be DIFFERENT.
o    Always use different stops and targets.  Find support and resistance on the market you’re trading and use that for your stops and targets.
o    What’s my risk tolerance?
§  Do I have a problem taking losses?
§  Am I unafraid of small losses?
o    What’s your trading experience?
o    10 years of experience or 10 minutes or experience?
o    The more experience you have the wider your stops
o    The wider you stops the wider your targets can be.
         
–          Why does the profit target NOT get filled sometimes?  Liquidity.
–         
–          What is my definition of the perfect pattern?
–          My job as a new trader is to find MY PERFECT PATTERN and then practice until you know it more than anyone else.
–          JJ’s perfect pattern is a trend reversal 2-step off the HOD/LOD
–         
–          Divergence arrows, how important?
–          Use the notes and watch the video in the advanced course to learn more.
–          The slower the chart timeframe the more important the arrow signal.
–          4range arrows are NOT as important as the 21range arrows.  Slower = more important.
–         
–          Large accounts with low volume markets, how do we trade these?
o    Under 20 contracts you have no issues ($50,000)
o    Above 20 contracts you now need to worry about slippage and lack of liquidity.
o    Entry will not be as good, it will be a little bit different b/c of slippage.
o    Need to give my targets room to be filled.   
o    Multiple timeframes for double confirmation, what do we use and when?
o    Two Most popular ways to use multiple timeframes:
o    Trend lines:  mark your TL on the slow chart and use that trend line as your guide when trading on a faster chart.
o    Momentum:  im looking for multiple timeframes to have momentum pointing in the same direction.
o    Example, looking long:  all momentum curling up.
o    What are the different market personalities
o    Moving stop to breakeven, what are my options?
          
–          Why is it more difficult to trade the Euro breakouts?  Its high volume, similar to the ES           
–          What if my power goes out while you’re in your trade:
–          Find a new set of underpants (scared!!)
–          Call your broker
–          Toll free number, best thing is to have a toll free number directly to the trade desk.
–          Stops and targets are still active, they are already on the server, not YOUR computer.
–          If you lose power or your internet often (once a month) I would suggest a backup
–          Power backup is easy ($300)
–          Internet back-up may be tough, so look in your area and get some sort of back up plan in the works.
Different market personalities:
–          High volume , lots of moves (good)
–          Low volume , no moves (bad)
–          Long Bias (dollar was dropping)
–          Short bias (dollar was rising)

    schooloftrade

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