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Several have posted regarding newsletters and trading methodology, and
given a few minutes on Thanksgiving I'll share my "pre-flight" checkout as
to how I plan my trades for the coming month. I do not care to day-trade,
having found it less profitable and more time-consuming than what I now do.
I like only entering into trades where I can compute probablilities of
success which I think justify the commitment of cash. I always undertrade
my account, that is stops aside I've never had worries about being "blown
out" of the markets. My rule there is no more than three contracts per $10m
in T-bills equity.
I'm a great believer in seasonals. I subscribe to Moore Research reports
and start each month with the 15-20 high historical probability recos that
their database defines. Moore (mrci.com) does not give opinions or trading
strategies, just statistics.
I read Consensus (consensus-inc.com) and get COT reports. I confirm the
MRCI trades if the trend of the commercials' positions is in the direction
of the historical seasonal.
I look at the charts (using Metastock and Pinnacle data end-of day &
continuous contract info, going back for the same 15 years that the MRCI
reports cover. First monthly, then weekly, finally daily for the contract I
intend to trade. Got to get the trend, not go against it.
Then I use some indicators which I've developed -- they're not that fancy,
modified standard deviation channels, a couple of Tom DeMark's set-ups (in
his book, but took a while to program so they told me anything on
MetaStock), a money flow spread (i.e. CRB versus an ag or soft to see
trend.)
Recently, I've been working more on concept of time cycles/Fib dates . I
just use them to confirm a trade entry within the period defied by the MRCI
reports.
That gives me a target of 10 or so trades a month. It takes about two hours
to run throught this & I've got my approximate entry dates and points for
the month.
I'll get out with trailing stops (normal stop is otherwise about $400 per
contract. If a seasonal doesn't work quickly , it isn't going to most
times!) or when profits ar 1.5 times average profit of the trade of past
years as defined in MRCI report.
I check prices and stops at end of each day and reset as needed.
Interested in similar logic or lack thereof from other traders. Please do
not hound me for greater specifics on indicators, etc. They're far less
important than the overall discipline.
Enjoy your turkey!
Paul Arutt
Phoenix
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