It is my belief that over the coming years, effective trading will involve being able to be both long and short the major indices.
To this end I have developed daily strategy.
As a dairy farmer, I have the advantage of being up before most traders. On clear negtive (positive) days I have found that whereever futures close at 7 am they are at least likely to retest or go lower(higher).
I therefore take an intitial position on that basis. I leave stops wide at this point, 30 points. If I am correct from 9.50 I move my stop into profitable territory at the earliest chance and contiinue to trail as best I can.
If wrong I this is the one time of the day I allow $ cost averaging and work on getting out as best I can. Having said that, there is generally enough early volititility to get out ok.
After 10.15 am, any new trades must have a 10 point stop. I therefore need to be pretty confident before entering. So often in my past good early profits have been blown away by sloppy intraday trades. This helps me avoid this.
I don't aim too high. For instance today netted $350 and trading day was over by 10.05am.
I have not had confidence to reenter today, and that is fine.
I will now look at the 4-4.30 pm zone. If I see a clear trend forming I will place an opportunistic order which may or may not be filled.
Wild volitity in this time frame can be a good opportunity.
Evening and overnight is too hard to maintain a proper stop loss policy.
We live off our visa card. My farm income goes into a seperate savings account. Every month I aim draw enough out of my trading account to pay the visa. This keeps me sharp and focused and less sloppy. If I have to pay interest one month, then that really makes me disciplined.
I admire people who can take a longer term view in this market, but I do not have the guts or knowledge.
I have a young family. We live simply.
Acouch's numbers are a great guide to me.
Not writing this to blow my trumpet but rather build discussion and hear what other people do.
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