Trading Rules

Those Rules have to become habits, doing them automatically, without questioning or even thinking.

After 21 days of respecting those rules they will become habits. Repetition is key to create habits. Don't question it or find excuses JUST DO IT on each single day and trade.

• Trading hours: From 9:00 to 12:00

• Number of trades per day: 5 trades Maximum. Ideal 2 or 3 trades per day.
• Maximum loss permitted on a single trade: -30 points.

There are 3 types of markets:

1. Short market: it means the Bears have the power and selling is the order of the day
2. Long market: it means the Bulls have the power and selling is the order of the day
3. Lateral Market: the Price goes up and down in between support and resistance in a Canal.

Before entering IN (opening a  Position either sell or buy), you have to have a clear idea what kind of market you are getting IN.

So that is the first question you need to answer. What kind of market are we IN?..check a longer timeframe chart than you are trading with to do so .. a daily chart, or a 2 hours candlestick chart will determine the major trend if you are Day trader.

There are a few more questions that I believe are necessary to ask yourself before you enter a trade.

1. Is your entry price close to an edge previously planned ? or is it a hint or intuitive trade? Are you trading your plan or are you ignoring your plan? Are you getting IN just for the sake of getting IN?
2. Is your trade following the major trend or going against? There is nothing wrong in going against a trend( they may even be the best trades), or try to determine the turning point of the trend, just make sure you respect your stop loss ! and be open minded and flexible with your judgement. Anything can happen.
3. Is your stop loss reasonable around - 25 / - 30 points( for the Future Ibex Plus) If your stop is too close or too far then rectify your entry point.

When you are in a winning position and following a trend, don’t get out too fast, move your stop under the last candlestick and keep following the trend.

There is an important factor that you have to understand, once you are IN, your capacity to analyse what is happening is reduced. When you are out, meaning that you do not have an open position, your ability to see opportunities is greater. Keep this in mind, especially if you are in an open position with a little loss and the price is not moving, you are getting frustrated because of the wait and the more you wait the more you convince yourself that the trade will go the way you have chosen previously. Your frustration closes your vision  and because of that open position, your don’t  read the chart as a neutral trader., there is a feeling of possession that affects your vision. The best solution is usually to close the position or reduce the stop loss so you can get OUT the market and have a clear vision of what is happening.  Being OUT, waiting for the price to move is important, patience to wait for the opportunity. You can be waiting 30 minutes for the price to reach a pivot point, get in and take 30 points profit in 2 minutes! That trade was 32 minutes long, not 2 minutes. The waiting and the patience is part of the trade

TRY ALL THE TIME TO VIEW THE MARKET AS A NEUTRAL OBSERVANT.

You also need to observe yourself and write down your feelings and thoughts when you enter a trade. After 20 trades you will be able to see what feelings and what thoughts are good for you and avoid the ones that are not good for you. Your mood and your state of mind determine your vision and interpretation of the market . Learn yourself and Learn when you are a winning state of mind, what thoughts and feelings originate the winning trades? Once you have reach that state of mind, it is just a question of repetition and consistency. See what works for you, what state of mind you need to be IN and just keep repeating and repeating it again and again and realize that it is impossible to win all the time, and take each trade as unique.

Attitude, State of mind, flexibility, discipline, concentration, control of your emotions( you can’t get rid of your emotions, you need to learn from them and use them in your favour), common sense, patience ...

Also don’t over complicate it, it is a simple work and it isn’t that hard, just with the basics and discipline you can make it. Have a weekly goal, so you have an idea of what you want to do and you can enjoy your success and be satisfied with your results. Don’t be hard on yourself, you can change your goal.

Xavier Sierra