Some trade snapshots
Hi Folks,
I've been looking to improve my record keeping and trade planning.
The best procedure I've found to date is to use brief hand written notes for each trade as it unfolds.
These can be entered directly into the journal / log and then used as an easy reference
for marking up charts on the PC later on.
For planning trades even on faster 1min charts, the essentials are tackled first.
Open the chart, have a good look over the key features and be aware of the longer term trends.
Mark in all key S/R and trend lines. Pay particular attention to any S/R pivots or indicator divergences which may be forming. Is the price under the SMA or above it? Is the SMA rising or falling?
The TA forms the framework for the trade plan. You can't even begin to think about a trade until this ground work is done.
Once the key TA is done then start to see if there is a possible set up available or if one is developing. The set up could be a range breakout, a trend line break, a divergence or pivot level break. If there's nothing obvious to see then the game is off.
If there is a set up, next question is can I afford to play it?
I draw in the stop level, work out the position size keeping the potential loss within budget. I try to offer stops some form of protection if at all possible, tucking them behind S/R levels or recent lows.
I've stopped using targets for exits. I just use a simple MA's now, exiting as the price retraces into them. I'll use either the SMA(12) or SMA(23) depending on how choppy the price action is.
Once the stop is in place on the chart I wait for the entry level to be reached and then enter the trade plus stop level on the order ticket and click the submit button.
If things go well I will take half the trade off as soon as the price moves above the entry level by the same amount that the entry level is above the stop level.
This reduces rewards for the remaining half but also reduces risk; the price has to swing back all the way to my stop to take me out for net break even.
Once things are moving and the second half of the trade starts to clock up pips, I'm kept very busy managing the stop level and watching out for any regions where problems may occur.
If the trade doesn't work I take the hit at the stop and mark it down as part of the cost of trading.
I've also started taking screen shots of my trades as they progress. I think this gives more information and captures events as they happen rather than relying on my selective memory.
Here are my two sets of screen shots from today. Each set of four (a to d) is a single entry following a set up but with two exits as per my comments above. Nothing spectacular I'm afraid but it's just to map out the process.
Just to keep things clear, I'll include the first set here with the second set to follow in my next post.
