Updated 03/15/2020
"Your job as a trader is to predict the future"... Anton Kreil
♦ My Simple Rules ♦
My rules for scalping bits-and-pieces at a time :
1...Only take LONG trades (I rarely Short) ...
the methods described on this blog work more consistently with buys than sells
2...Always use BUY BRACKET Limit orders**...
with predetermined auto-placing TARGET orders and initial protective STOP orders
3...Never lower your initial STOP order...
raising a STOP level is acceptable as the trade progresses.
** Lately I have been using BUY STOP BRACKET orders...
These are placed above the current Bid/Ask and get entered
as market orders once my order level is hit.
An example of how I set my Bracket Orders
Below is an example of how Bracket Orders work on my software
Bracket orders simplify the trading decision making process
This type of order immediately places offsetting position exit orders (one fill cancels the other).
Either or both sides can left alone to control each trade outcome
while also allowing for either side to be changed or canceled.
BUY STOP bracket orders
... are placed above the current price to catch break-outs. They can also
... are placed above the current price to catch break-outs. They can also
prevent some Stop-losses by keeping you out of positions when price just drops
*** Issues when using BUY STOP orders ***
(Link is currently under construction...)
*** Issues when using BUY STOP orders ***
(Link is currently under construction...)
BUY LIMIT bracket orders
...are placed at the Bid/Ask to enter positions immediately...or
they are placed below the current price so that price has to come to you.
Below is a typical example of a"successful" trade in the YM e-mini futures.
Order entry reasoning and the trade management afterwards are shown.
It is showing a Buy-Stop bracket order placed above the current price. The signals used
to rationalize placing the order were added to the chart by me for illustration purposes.
Right hand - 30 tick showing what happened after the order was placed.
The buy-stop was not immediately filled...price 1st spiked down below the 2B level, then filled on
the next up-spike...the bracket Target and Stop-loss orders got placed automatically.
Before the Target was hit there was time to raise the Initial Stop-loss price to a new level.
Discretionary Bracket Order Levels
For the YM, my personal "discretionary" initial bracket order Target & Stop-loss levels
are +10 ticks & -4 ticks respectively. I often use higher Target levels if the markets are very fast...
I also use different levels dependent on the market I'm trading.
12/20/2019 -- Note --
Due to increased volatility in the markets, I am considering making a change to my bracket levels.
I may begin using a 5 or 6 tick initial STOP with a 12 or 14 tick TARGET
I have been documenting my trades via chart screen grabs for many years
Chart and mouse set up picture link
I maintain a 2nd blog for this purpose...also for accumulating my statistics
Daily Trades and statistics blog
Be clean and green at the end of every day
Do not fool yourself into thinking that Exchange fees and commissions
play a very minor role in trading.
They ARE very significant to your bottom line and only become less significant as your potential loss or risk tolerance increases.
EXAMPLE:
If you risk $25 (5 YM points) the fees add nearly 30% to your loss.
If you risk $100 (20 YM points) the fees add only about 7% to your losses.
Some addition things to consider regarding the ideas presented on this page
OTHER IMPORTANT CAVEATS ! ! !
