Wednesday, April 11, 2018

One Good Trade: And Luck... Good Trading Day

One Good Trade

A new addition to my trading rules. I am calling the new rule as the "One Good Trade" rule.

It is basically inspired by my experience in trading Opening Range Breakouts, where my aim was to try to catch the big move of the day from Day Open. That meant either no Trailing Stop Losses, or very wide Trailing Stop Losses. However, there are differences.

The obvious difference is that the trades are not restricted to only Opening Range Breakouts. The entries are based on a variation of the Range Compression Trading System that I traded in Q1 2016. Plus, when compared to my trailing with the Opening Range Breakout Systems, here I do trail quite early before I relax the trailing, just to not appear stupid.

So, in a way, the currently evolving trading method is a mishmash of a lot of my trading experiences. I am still getting the hang of trading Stock Futures, after having focused for long only on Nifty Futures. The current five digit price of Nifty Futures is significantly high compared to what it was a few years back, while the daily range of Nifty has remained almost the same. So, for capturing the same price movement in Nifty Futures, the cost in points has gone up, making it a big disincentive for day trading. I think that one factor affecting Nifty's movements is the fact that the gap between Option Strike Prices has remained at 50 points. Maybe sometimes later, I will have a look at trading Nifty Options, but for now I think Stock Futures may just work out.

Today's trades

Today, indiscipline saved me. I opened my terminal well after 9:30 AM, and liked the look of DLF, TATAMOTORS and TATASTEEL.

My first attempt was to go long on DLF. Luckily, that order was not filled. Then, I realized that I had missed a short in TATAMOTORS. So, I placed a Limit Short order on TATAMOTORS. Luckily, that did not trigger. With the new One Good Trade rule, that short would not have made a profit, and would have also caused me to miss the long trade. When I saw that the DLF long would have failed, I wanted to go short on DLF, but my money was already blocked in the pending TATAMOTORS order. Lucky again!!

The first long on TATAMOTORS took a long time to move, but I held tight based on the One Good Trade rule. It turned out to be a good day, with all my trades being in TATAMOTORS, and no losing trades.

Day Trading Price Action TATAMOTORS
Day Trading Price Action TATAMOTORS

Day Trading Price Action DLF
Day Trading Price Action DLF

No comments:

Post a Comment