Tuesday, 15 June 2010

To Trade or Not to Trade. That is the Question!

Paraphrasing Shakespeare may be trite but it's a very important part of my trading plan.

There are different types of day-traders. Some who only trade very selective setups, and others who trade all day and grind it out, adapting themselves to the volatility and trend of the market throughout their session.

This is a problem if you don't know which one you are.

Defining your business is a critical part of your trading plan as so many things flow from that. Part of the decision making process I go though as I evolve - and I am still evolving - is to look at myself and what I am good at and what I am not.

The first step is to decide your own business hours. This choice may make a lot of the decisions for you. Part of the process is to recognise the different phases the market goes through during the trading day, looking at your performance, likes and dislikes, stress level and so on.

I have had to change my trading plan as I started preparing for the training I am giving in July as well as preparing for the post training support I have undertaken to provide. The consequence of all of this is that I cannot trade the hours I was doing and something had to change.

The change I settled on was to mainly trade the opening of Eurex and then the opening of RTH of the ES. I looked at my highest win rate trades and increased my size so my earnings for the 3 or 4 hours of work would be as much as a previous normal 10 hour day.

Strange thing is that I really like it and will probably continue with these hours after the training and support period is over.


  1. What's the bottom panel showing? I can't figure it out, and haven't seen it before. Thanks for your insights.
    I probbably should have quit after the NY open as well. Hard for me to trade these one-way up days.

  2. I have a question El. I understand if you cannot answert it as I am sure you get a lot of requests, but here it goes. I am trading index futures and I am rather CP with less than 15 down days per year. The problem is that I am making to little money (1200 dollar a day average), and I seem unable to up my contract size as it affects me psychologically After 2 years of being CP I still somehow think it is partly luck and not skill). I have tried to increase the number of contracts in several ways but I somehow seem to "slip back" into my comfort zone. Do you have any advice to give regarding my situation? It would be greatly appreciated.

  3. Anon 03:48, VWAP
    Anon 08:09 This is a huge problem for most of us. I still remember my first 100 lot trade when I started on the floor. The whole pit cheered when I did it. In hindsight, what I should have done to get me there sooner was to imagine myself trading the size. Maybe even go back to SIM and trade the next size up. Its a matter of getting your mind to accept what you are doing. Also, increase your size one step at a time. If you are trading 3s then try 4s if the number fits your trade management rules, then after you have accepted that, 5s and so on. I usually have this problem if I make any change to the way I trade. It must be due to some subconcious uncertainty as you said. It can't be luch if you're CP.