Trade Plan

All trading is a function of :

  • Fundamentals
  • Time (Sessions)
  • Price
  • Volatility (ATR)
  • Volume
  • Direction


Classes of markets for portfolio building. From The Way of the Turtle P127, by Curtis Faith:

  1. Fundamentals Driven. Currencies and interest rate instruments. Driven by economics and central banks. Good for trend followers. Dominated by business not speculation.
  2. Speculator Driven Markets. Driven by trader sentiment. Stocks and futures, like coffee, gold, oil, not suited to trend following. Curtis’s idea of medium term trend is months long. 3 weeks is very short term.
  3. Aggregated Derivatives Markets. The e-mini is constrained by the underlying S&P500 index. The SPX is an aggregation of speculative stock moves, the aggregation dilutes the sentiment. These are the hardest for a trend trader to trade. Curtis did not trade these during his Turtle period.

My Trade Rules

  1. A move comes after a consolidation, get in quick.
  2. Get a stop at break even, quickly, defend your capital.
  3. The only reason to sell is that the instrument has reached a previous selling price.
    1. Don’t buy the top of a range or sell the bottom. Breakouts are only 15% successful
    2. Do sell double tops and buy double bottoms
  4. Market Makers are limited by the daily ATR, they have to balance their books
  5. Weekly and monthly portfolio re-balance is practiced by the big traders
  6. The banks pull the price back into yesterday’s range to fill their client orders.
  7. Data. If the consensus is in line with the technical, and you agree. Get in front of it, have a wide stop.
  8. After a holiday or a big loss, take a day to recover the basics, update your allocations calculation sheet.
  9. When shorting a lower high, the new low should beat the previous low.
  10. Avoid trading into big data, but consider holding if you can get a 1/2ATR stop.
  11. Normal speech based moves will retrace quickly. Only serious policy change sets a new trading range.


I trade with Oanda, their rules, margin calculations and products are explained here.