The Ultimate Intention of this Business Venture is to Secure CONSISTENT Reliable Profits on a Daily, Monthly and yearly basis.
Business Philosophy
I view this business to be a mirror image of the Gaming Industry in which I am the Owner and Manager of the Casino. The difference is that Trading is NOT Gambling. Book makers don't gamble, they take high probability Risk.
Trading philosophy is based on 3 key principles that keep me in line with the psychological realities of the market environment.
Trading philosophy is based on 3 key principles that keep me in line with the psychological realities of the market environment.
- Respecting The Principle of Uncertainty is honoring the randomness of the market. A constant reminder that Anything can Happen while exposed to the field, therefore I'm not compelled to know what will happen on a given sequence in order to secure consistent reliable profits on a monthly basis.
- Place NO Expectations on the Game or Market. In doing so i can be an objective observer investing NO personal attachment to any given outcome. This is the power to Supervise the game with the utmost Clarity.
- Every Moment is Unique in the random market place. To understand this is to respect and enjoy the "Now Moment" of every sequence. This is the zone upon which I become childlike in my curiosity. Quietly observing the creative nature of the collective consciousness of all the market participants.
Ultimately The battle is within the self. The intended outcome is the elimination of Expectations on the market. To void any Ego axe's to grind with total submission to the FACT that we can never know which hands will be right or wrong on any given Gaming sequence. In fact There is No NEED to be right on every trade, because it has nothing to do with CONSISTENT profits. Thus, the idea is to observe the Ego by avoiding CONFLICT altogether by simply being the observer, allowing the market to communicate its highest probability opportunities. Efforts and Struggle happen Outside of the Zone.
The tenet's listed above are not merely a means to an end, but a lifestyle of experiencing expanded awareness and self realization.
Functions of the Odds Maker
My Duty includes Development, Implementation, Execution and Management of the games. Games in this business model are specifically Ranked Sequences and Trading Systems that provide a distinctive edge over the field. Management and Execution are Critical functions to the success of the business and can be broken down into 3 components. Game Management, Daily Money Management and Account management.
Game Management functions include Trade Selections, Daily Trade Reviews and Per Sequence Oversight. Trade selection is a system that forces strict adherence to game rules by Qualifying setups within the system within specific gaming hours. The Sequences are ranked by definition and will be qualified prior to implementation in order to prevent stray and/or Unqualified games from entering the Casino, ie Impulsive executions of trades that are NOT included in my systems inventory. The Gaming hours are design to provide max exposure to the highest probability to the success of the house. Gaming hours are sections of Time Intervals starting from 6:30 to 8:00 and 1 trade from 10:30 to 11:30 only. Action outside of these times are Prohibited.
The Daily Trade Review provides immediate quality control and prevents reckless exposure insuring that i keeps accurate records on system performance and gaming records. I write the reason for entering after setting my stops and targets and keep a journal about that sequence as it progresses documenting the entry, exit and anything interesting that I observe.
Per Sequence Supervision. Like a dealer I execute the sequence as well as monitor its progress from an objective perspective. Like the Odds Maker, once the sequence is initiated I become an observer of the market action, however at my discretion I have the power to make adjustments to my position based on market action and responses from the field. This action is only in the interest of extending profits under specific circumstances.
Daily Money management is the ongoing book keeping and audit method that allows me to predict and cap the Maximum Loss Exposure per Sequence. The Max Loss potential on any given day is predictable to the extent that the gaming hours are respected and strictly adhered too. The money management also includes position sizing for adjusting to higher probability opportunities in the marketplace. Only adding to winning positions, Never adding to losers
Account management is Handled by my Supervisor and my, it includes how I Handle the Profits, Transfers, Taxes and General Book Keeping. This Includes Asset Allocation and Longer term Investments. When I transfer profits I'm buying other tangible commodities such as Gold, Silver or platinum. I will also move cash into foreign account such as Sterling or currencies that are showing signs of stability and strength for the near future.
Why I Trade? Trading is an Art form, The ultimate game of Self Mastery that can be expressed with Instant direct results. I enjoy the personal challenge of inner will power, discipline and focus. Trading cultivates patience and intuition. Like fishing, watching chart patterns develop can be calming, forcing me to visualize a particular outcome or opportunity that may or may not manifest. The stillness of waiting is the attraction and the catch or seizure of opportunity is the reward. At the end of the sequence i will know a small victory or defeat prompting me to return to the stillness to await the next random outcome. Trading is the physical challenge of self discovery, an outward expression of my inner journey. My evolution in this Expression of Trading is marked by the energy of Money.
What is my Motivation? Heath for self and family having natural resources such as garden or herbs and Veggies for my family. Freedom, Travel and Mobility for my Family to provide the best opportunities to my Daughter through Experience of other cultures and lifestyles. Trading will allow my family to live anywhere in the world for months out of the year while maintaining steady income to access the resources needed to maximize our healthy lifestyle.
Time I Devote to Trading and Learning? I Devote as much time as possible, anytime I get a chance to read a new book or article I do it. However 2-3hr per day outside of trading is the norm for rapping up my recordings and reviewing my trades for the day.
What Market Do I Trade? S&P Emini (Electronic- futures Contracts).
Why I Trade the S&P Emini's - One reason I love the ES is because it is consistent with my basic sleep schedule. And since the markets closes at 1:00pm Pacific time I'm forced to quite, win lose or draw. Even though you can still over trade the damage would have to be very hard and fast. The Emini's Provide enough Range, Liquidity and Volatility to provide enough opportunities on a daily basis to establish consistent reliable profits. Another key reason I trade the Emini's is because my strategy is based on Volume Spread Analysis, which is a general discretionary system that focuses on the Truism of how the Markets functions from the perspective of a Market Maker, Professional Trader and most importantly the Specialist. This is possible because of the futures availability of the true volume traded at the bid and the ask as well as Block Volume accessibility, as opposed to the Forex markets where tick data is the closest you can get to volume.
The Margin provides good leverage: 1 Full S&P Emini Contract = $4375
The Margin provides good leverage: 1 Full S&P Emini Contract = $4375
50% divided by 4375 = $2125 per contract
25% divided by $4375 = $1093 per contract
Balance must have the per contract amount available
What Separates Me From the Average? My Patients, perspective and Contrary views of the world are just a few. I truly believe that 90% or more of what we think we know about life, America and the world is False. This helps me see things that the average Joe will assume doesn't exist. It helps me to hold opposing views of the same concept in my mind without judging. I'm very open minded and objective and will change at will if I feel its needed. I have been know to be a very Discipline person, this has taken time to translate into my trading but my path was corrected ounce I created a good routine to follow such as updating my blog, morning workout, daily trade review and pre-open routine. What ultimately separates me from the average is that I'm willing to put in 12+ hours or more a day studying my charts, my stats, documenting my observations and educating myself. I'm also willing to work tirelessly at subduing my Ego, this is where most will fail. Many people are simply Not interested in changing their perspective and being totally honest with themselves, and even fewer will be willing to work at it. I'm fully dedicated to the art and i can honestly say that i love all the work that surrounds trading. I actually look forward to documenting, reviewing and critiquing my performance for the day. Conscious Self Improvement is my passion and trading is but one way to test my progress with immediate results on a day to day basis.
What is My Trading Style and Personality? I consider myself to be an intuitive Discretionary trader. My Methodology provides a little wiggle room for discretion and intuition. I Primarily focus on short term setups of 2-4+ points depending on momentum. I have provisions to move the target out when the tape indicates more profit potential and i remain within the allotted number of trades per day and time rules.
Time Management Plan Surrounding Trading - I spend at least 1 hour a day updating my journal on how the day went and what I expect for the upcoming trading day, as well as noting the Globex activity prior to bed. My Bed time is 10:30 in order to get up at 5:30. I Brush my teeth, wash my face and put on my clothes, Then do an isometric routine to failure before Stretching, doing yoga poses, and then clearing my chakras. I finish with a Gratification meditation and visualization of a good trading day. This leaves me with at least 10-15 minutes to review the globex session and pre-open for directional bias and Ice Breaker Qualification. After the trading day I spend time with my daughter "Daddy Day Care". Whenever I get breaks I'm usually reading more trading material, documenting my observations and ideas or watching educational videos.
What Are My Weaknesses? - Not too good at organizations and structure so i have worked very hard to create a vehicle to enhance those areas, this blog is that answer. I'm also looking to change and grow, so i may tend to fix something that is not broken. I need to be reminded to get back to basics sometimes. I also Tend to have win streaks that cause me to try to AVOID losses, When I do get a loss I go into revenge mode and can spiral into Over leverage and Over Trading. This is Addressed in the SUPERVISOR Duty
How Do I Address My Weak Areas? Daily Trade Review where i break down why entered each trade, the results and what i could have done better. I do this daily on my blog as a general overall assessment as well as Daily re-evaluation of my results using the Scorecard for Overall Performance. Also Implemented a SUPERVISOR to oversee my Daily and Weekly Activity
Supervisor Duties: Supervisor responsibilities are to hold me accountable for my actions, they have authorized access to check my progress at ANY time with out my Knowing, Adjust margin and /or Lock the platform if needed. This forces me to be truthful with myself and be mindful of my actions
- Check account Equity Curve 1-2x's per week(or randomly). By logging in and going to P/L
- Check the Times each trade was initiated (Daily): Goto Fundsdirect@blogspot.com - Daily Trade Review, Look for 90 GRIND indication in Sequence rank. (If trades are initiated outside the 90 Grind and/or after 8-10am then this must be explained. (even if point total is profitable)
- Check Traders Point Total (Daily). Goto Fundsdirect@blogspot.com - Daily Trade Review goto the bottom of each Day's Review to determine Win/Loss days.
- Check Daily Recorded Videos (Daily). Goto Fundsdirect@blogspot.com - Check Main page for Videos post. Should have at least 3 videos up per week -If not trader must be called to reason.
- Monitor Excessive WIN streaks (2+ weeks) particularly without videos to match Goto Fundsdirect@blogspot.com - Note Daily Trade Review (This is due to the potential of trader breaking rules but yet to suffer losses) This behavior warrants account locking. Win Streaks Must have corresponding videos to confirm rules adherence.
- Criteria for Locking the account (forcing 1-2 day suspension):
- 2 minus point losing days in a row.
- Any loss total of more than 8pts in 1 Day session.
- 2+ week win Streak without Recorded videos to match.
Daily Routine for Success - Keep a Journal to document all my trades, my performance for the day and any intangibles that I learned. Taking Notes or Talking while recording each trade. I have a section covering Intangibles for ideas as well. I use a Excel sheet to plug in all my Indicator signals in order to get a directional bias for the upcoming trading day. See Pre-Prep Routine. and Market Bias Indicator
What Type of trader Am I? I consider myself to be more intuitive, so my style is discretionary with a specific system and set of rules, BUT with some flexibility to change if VSA basics take precedence. I use Volume Spread Analysis as the Foundational Concept Behind my trading. I then use a series of Volume Based indicators that Focus on Cycles and Momentum (The Better Indicators From Emini-Watch).
What Time of Day Do I Focus on? Trading hours 6:30-8:00. My peak focus is centered on the 1st 1hour and 30 minutes of the Day See ( 90 Minute Grind for Limiting Market Exposure). I focus all my energy on this time window. I will seek opportunities till 11:30 but I usually stop if I hit goal or have to bench for poor performance.
Entry Criteria - My primary trade sequences are volume, cycle and momentum based. see My ranked Trades. This is a list my primary sequences ranked according to what i consider to the ideal setup. More info in my Bread and Butter Setups.
Exit Criteria - I'm using 4 points Stop and 4+ point target for fluctuation room to allow me time/space to analyse the position. If it is moving in favor I Leave it alone. I DO NOT USE TRAILING STOPS!! I Exit positions under the following circumstances:
- Hoping, Wishing or Preying is the 1st Clear Signal to Exit
- 4pt target or Stop is hit.
- If the action warrants extending my target then I look for a pro bar on the 1500 tick with Exhaustion to Exit in that area.
- Opposing Signs of Strength or Weakness - Pro bars or Block Bars on the 1500 and 4500 Ticks showing up at S/R.
- If trading during the 90 Minute Grind Time, I Exit positions that are at or near Time Intervals. The Time Interval usually signal potential change of direction or resumption of trend. This is where I Reassess the progress if Extending a target.
- Real Time. If Not stopped out, My most successful trades could take up to 15 minutes. I Hold the Positions for a least 15-20 minutes and 25 + minutes If extending target and trade shows signs of continuation. I watch the 5 minute chart from order entry point to track the time.
- Inevitable Targets - These are established during the Nightly Prep-rep routine. They are Support/Resistance based on the Volume Point of Control from the daily Volume Profile charts. Set Limits .5 to 1 point from Inevitable target and assess the possibility to Exit on a Close on Market Order.
- On Liquid Trades I exit when the premise is wrong and into rallies as price moves into favor
For more Details See links for Stops and Exits.
Money Management Criteria
Im looking to book 4pts minimal on the Day, Once i reach 4pts then i stop trading for the day.
Im willing to lose 4pts maximum on the day, Once i lose 4pts then Im benched for the day.
Managing Risk With Size - This is the key to my trading. It allows me to assess the environment with minimal risk prior to committing more lots. I use one lot probes to get into the flow of the market, if the setup proves to be in favor then I look to get more on often worsening my average position. If the trade is stalling outside of profit then i can cut it with a very minimal loss. This technique keeps the average win larger than the average losing trade and is critical on poor trading days or when i get off to a slow start.
Im looking to book 4pts minimal on the Day, Once i reach 4pts then i stop trading for the day.
Im willing to lose 4pts maximum on the day, Once i lose 4pts then Im benched for the day.
Managing Risk With Size - This is the key to my trading. It allows me to assess the environment with minimal risk prior to committing more lots. I use one lot probes to get into the flow of the market, if the setup proves to be in favor then I look to get more on often worsening my average position. If the trade is stalling outside of profit then i can cut it with a very minimal loss. This technique keeps the average win larger than the average losing trade and is critical on poor trading days or when i get off to a slow start.
- Ranked Sequences - These are Specifically outline trades that fit into my criteria for entry
- I add x contract to existing positions on high ranking sequences that pull back or develop into other ranked sequences in the same direction. The idea is to maximize size on my highest probability sequences once they began to perform.
- Conversely I increase the lots traded once we go above the Initial marker in 10K increments. ie. At a $50,000 balance I trade 5 contracts. If I go up to 60k I trade 6 contracts. $10,000 x 25%(Money Factor) = 2500/2 =$1250 or 1 Contract per 10k.
- Liquid Sequences Im using 2 lot increments with a max of 10 lots per 20K based on the above money factor of 25% using max leverage of 25% of Margin. Liquid trades are spread out over a defined wholesale price range of not more than 4pts top to bottom.
Strategy Adjustment Plan - I Go back to the Basics of Specialist and Volume Analysis. Review Daily Trades as well as Battle Plan Details and Update my Observations.
How do I manage Draw downs and know when to take time off? Using stops and monitoring my mistakes daily to avoid the big draw. I bench my self after 3 losing sequences in a row. (liquid sequences included. See (How to handle Mistakes, Glitches and Draw Downs) See Supervisor Duties.
Trading Software - Tradestation because I can use there platform for free, in exchange for using there broker services. I also really like the charting capabilities and My main indicator was created in Easy Language, so the compatibility is good.
Do I re-invest Profits? I reinvest only 50% of profits past 10k. I withdraw the other 50% as often as Monthly to limit personal exposure to Banks and the Electronic Economy.