Wednesday, 2 March 2011

ES Today

Creating a trading plan (TP) is the same whether it's for discretionary trading, automated trading or hybrid trading.

Lots of decisions need to be made related to a number of things. One of those things is the rhythm of the trading you expect to do. What sort of peaks and valleys are you going to trade and how are you going to trade them. Are you OK with noy exiting at, say a peak and sitting through the pullback and watching a new peak (Higher High) until you decide to take your profit. Will you scale or not? What will tell you that it's time to exit? What periodicity will you trade?

The epitome of a trading plan is the algo behind an autobot. It's the epitome because the algo has to be so specific and unambiguous. A good thing. Except for one thing: markets' volatility is continually changing, day by day. The day types are different too so you can't trade every day the same.

My answer to that is Hybrid Trading because I can decide to exit a tick or two before the "average" 'bot target or decide to only sell some at the target and put a trailing stop behind the balance. I can stop myself out before the "average" stop of Flo.

But, and it's a very BIG BUT, I need to do this in accordance with written rules so that i can do the same thing consistently. Then why don't I write it into the algo? Because there are many things in the context that I just can't program. So I write it into my own personal TP.

Today's ES was a good day again. The extra RED and CYAN arrows are my overrides today. As you can see, I didn't have too much to do today as my TP was reflected pretty well in Flo. This is because I have programmed my style into the algo. You can see that today was a gap day but Flo managed to trade away from the gap in the beginning, but caught the turn and traded the down swing almost to the Gap close.

As I write this,  we have a neutral day. Now I look for the point to buy a neutral day to trade it back into the middle. Hopefully, Flo manages the next part of the trade well. I guess I'll have to wait and see. I'll report tomorrow.


  1. Hi,Tom,
    What reasons make you envision a neutral day today?


  2. Jack, after that trend day down closing at the low, the low had to be tested. Steidlmayer used to call it "Free Exposure".

  3. Hi Tom,

    just learning here, would you mind to post your time-stamps entries/exits with price so we can follow your logic and kinda reverse engineer the process.
    I think that would be of big help to all of your followers.

    thanks & regards,