Trading rules

1. The market is a neutral entity and no one knows the future
2. Trend is the most important factor in the market. Tade with the trend of the underlying stock and the trend of the market. (three types of markets)A. In a up-trending market buy at support (bounce trades) and break outs (use filter)B. In a down-trending markets sell at resistance (bounce trades) and break downs (use filter)C. In a side ways market buy at support and sell at resistance use neutral strategies
3. Trend (king), Support & Resistance (Queen), Momentum (Joker)
4. Trade to trade well not to make money
5. Trade the charts not your thoughts
6. Only enter trades based on your entry rules
7. No naked put selling
8. Follow good money managementA. Risk no more than 2% on anyone tradeB. Risk the same on each trade based on trade typeC. Have no more than 10% of your portfolio at risk
9. Do a complete analysis on every trade you enter A. Weekly to daily (top down) B. Determine trend by looking for higher highs and higher lows for up-trend, lower lows and lower highs for down-trends, and equal low and highs for sideways trendB. Use the 20MA, 30MA, 50MA for trend indication, momentum changes, and as support and resistanceC. If Below the 200MA have a bearish basis, if above bullish, and as potential support & resistance area D. Start with the weekly charts and draw in support & resistance areas, and trend lines.

   E. Use candle sticks as momentum indicators, and as precise entry signals

   F. MACD two line as a confirmation of trend. Pay close attention to cross overs of the ZERO line, and also look for roll overs on the histogram on bounce plays

   G. When trading patterns have targets

   B. Relative Strength study

10. Trade only highly liquid stocks with options and the options must also have good open interest and spread ratio
11. Use a filter on every trade (example break above high of the low day, or in breakout trades break above highest high).
12. Do the work myself and don’t trade anyone’s recommendations that don’t fit my trading rules
13. Focus
    

    Trade Entry "Click to enlarge"