Thursday, 12 July 2012

What if you could only make one trade a day?

How would you trade if you were only allowed, by your trading plan, to make just one trade a day?

I had this thought today as I have relatives from Ireland staying with us for the next month or so. My wife and I get a couple of days in London to see the Horse jumping in the Olympics in the middle of their stay. The dog doesn't need a long car trip and neither do we.

So I'm in a sort of holiday mode. I have to work and earn. I have my longer term option positions that don't need much time and I turn Flo on every day, but I'm a local at heart and have to keep that discretionary trading going.

So what if I only did one trade a day with size, and then stopped, win or lose?

At first it might seem not such a good idea because instead of having the opportunity to make a red day green, I'd end up red.

But looking at the maths, it isn't so bad. Firstly, I'd need to work out the maths of that particular trading plan. Well I did.

I have a particularly nice high win rate picture I like to trade. It "works" on just about any market at over 80%. It sets up at least once a day or more but sometimes it's early in the day and other times it's later. So if I start my day at 7am in Europe and watch a number of markets and take the one that sets up first.

I have to position size each market so my dollar risk per trade is the same over the whole portfolio. that way, it doesn't matter which one I trade on any particular day. My profit target would depend on context and I'd work the exits as usual, scaling out.

Here is an example of this trading plan from this morning, London time. The ES was sold and covered at my FavFib. Profit per contract of 4 points or $200. Multiply this by the number of contracts you need to trade to make your daily nut and then go to the beach.


  1. I must ask. You don't just choose the product; you also change the range bar settings for the product often? How can ther ebe a consistent backtest for this? Frankly, for those of us that have read the blog for some time, it feels like cherry-picking after the fact.

  2. Anon 02:20, for the ES it's always 0.75 points (3 ticks) for renkos with wicks or 5 ticks for range bars - they trade similarly and keep the noise out. Having said that, the periodicity is not the "magic". I'm trading as a discretionary trader, identifying the trend of my chart and then trading the pullbacks. I don't post all my trades - I trade a lot and in different markets. What I'm trying to do is show a chart of a good trade or set of trades so you can see how these these trading pictures setup - there are over a thousand of them now in the blog - so you can learn to identify them in real time. It's helped many people to CP and that's my goal - to help people trade better.