Trading Plan

"Plan the trade and trade the Plan" is perhaps the most common advise given to traders. Planning the trade is very easy. But most of the time we fail to trade the plan. In the heat of battle we become nervous, tensed and fail to execute as per the plan.Still it is better to have some plan and  teach ourselves to stick to it.

We are trading a discretionary method. Everything cannot be defined in such a method. It is impossible to set rules for everything.Discretionary trading totally depends on our judgement. We need to take decisions as per our judgement. So the end result will vary from trader to trader even though we are trading the same method.

I have prepared a brief plan to guide us in trading the method. I think I have covered the most essentials in this check list..I wish you to remind that the method cannot be traded mechanically. It all depends on your ability to Read and feel the Market

TRADING RULES

Entries

• Trade only at Decision Points
• Hide Initial Stop behind a DP
• Entry preferably on break of a potential Flip Zone(To ensure two layers of defense)
• Counter Bias Trades preferably on BOF (Ensure orders from trapped traders)
• BPB entries preferably only on the first BPB of the move( To avoid over extended moves)
• Ensure Space for the trade to move

Trade Management

• Scratch if price crack flip and settle (Think Pressure Plays then)
• Trail using flips and pivots
• Exit at the next DP
• Exit on reasonable profit
• Always consider strength of the move before the exit

Market  Bias

Initial

• Price Inside or Outside of Previous Day Range?.
• Daily chart in Rally or Decline?
• Price at Upper or lower side of Previous day range?
• Price above or below PDC?
• Price above or below Day Open
• Price Gaped on open? Trend gap or CT gap ?
• Initial price move. Bullish or Bearish.

Ongoing

• Current range above or below the previous range?
• Last DP crack. Upside or Downside?

 Other Helpful Concepts

• Master Candles at DP
• Initial Range
• Channel after a spike
• Barbed Wires
• Layer over Layer
• Brackets and envelops
• Cigarettes
• Pressure plays and Traps
• Fluid
• Critical Mass

Finally the most important thing. Always think order flow. Learn to identify locations where other traders are likely to keep their orders. Try to position yourself to take advantage of this accumulated orders

Your suggestions are welcome for improving the template

12062013

Nifty Gaped down below PDL and started trading in a range. Being an announcement day did not attempt any trade till it is over. First trade was a BPB of range low which failed immediately. Scratched. Long on the break of Range low to the up side. TP at BRN.Shorted on the BOF of PDL/BRN. This one also ended as a scratch. Rest of the day Nifty got trapped in a Channel.

11062013

Nifty gaped down below PDL and failed to go above it. Shorted BPB of PDL. Nice move down. TP at BRN. Went long on the BOF of BRN. Covered when the next flip zone resisted. This acted as a range. Missed the next two moves. Tried a long on the BPB of Range High. Scratched it later. Short on BOF of Range high. TP below  BRN 5800

10062013

Nifty opened within previous day range.An Envelop formed overlapping the single bar IR. Did not go short on BPB of IRL as BRN/PDC and PDL was very close.Long on the BOF of BRN . Scratched the trade later as it did not move as expected.. Nifty again broke BRN and made a TST of PDL. Long again on the BOF of BRN. I expected this one to move. It moved after stopping me out for a point. Missed the down move as Nifty reversed before reaching HOD. Skipped the final BOF and break of  MC as it was too late.

Quit and Win

Recently I happened to read an advice given by a veteran trader to his deciples. The essence was, if we select and follow a study with discipline and patience Market will eventually reward our loyalty.

Yes, I agree. There is some truth in it. Many traders waste a lot of time and energy searching for the Holy Grail. They flirt from system to systems and methods to methods. It makes sense to stick to a method and become an expert trading it. Winners never quit. Wise men stick to their methods and get rewarded. It is conventional wisdom.

But there is a problem, Most of the traders are not lucky enough to find a profitable method from day one of their trading career. Many traders end up selecting a method without a true edge or something not suitable for their personality and stick with it for years without any progress.

Finding a method with an enduring edge is a trial and error process. We traders must be good at quitting. We must quickly abandon .and quit a method which is not providing a true edge. Simply sticking to some method will not make you profitable. Ensure there is an enduring edge.

Edge is simply the ability of your study or method to repeatedly  identify actionable price levels from where you can expect a very high probability non random directional price move. Test your chosen study and ensure there is an edge in it. Throw it out if not. Believe me,. Most of the conventional studies have no edge. Majority of the traders adopt these studies and you know very well what happen to them.

 Cult Leaders may reward your loyalty. Markets will never

07062013

Nifty gaped down and attempted to break BRN. BOF of BRN gave a long signal. TP at PDH. Price broke PDH and there was a BPB signal. Skipped it as Critical Mass was long. Went short on the BPB of PDH to the down side. Sudden bounce from the PDC scared me, but stop was above PDH. Covered the trade when price again fell to PDC. Could not get any reliable signal for the final down move.