My Futures Trading Rules

Posted by Deb | | Tuesday 29 June 2010 10:15 am

My Rules for Day Trading


I would like to formulate my set of rules for trading. These rules are rules I am finding helpful for me. Some of them I learnt from my teacher (at least in principal, not necessarily the details), some I defined for myself. Some of them may be universal, others may have only universal principles, but other people will have to adapt them to themselves. Each person has his or her personal strategies and comfort levels. I do think that most people need some set of rules to give a framework for their day trading.

I will give here a few sets of rules, separated by their themes.  I will probably continue to change and adapt them over the time, as things may become more clear or circumstances change.

Timing:

  1. Do  not trade immediately after the stock exchange opens (usually 16:30 Israel time).  It is also best not to be in a position when the trading starts.  Do not enter a position between 16:15 till 16:45.
  2. Do not be in a position when the market closes.  Do not enter a position after 22:45 Israel time.
  3. Do not be in a position during a financial report, and wait some time after it is announced.  Do not enter a position from 15 minutes before the announcement time till 10 minutes after.
  4. Do not enter a position less than 15 minutes before you have to go out for any reason (take the kids somewhere etc.)

 

Trading Limits

  1. Give yourself limits for no. of daily positions, daily profit expectation and maximum daily loss.  When one of these limits is met, stop trading for that day.  My current limits are:  3 positions a day,  $150 profit expectation, $250 max daily loss.
  2. Max. number of contracts at one time:  I set it now for 3.  That means that when I want to add a fourth contract to a posiiton in a better place, I have to get out of one contract, even if that means immediate loss.
  3. Max. number of potential loss per position:  $350.  When a position is having a potential loss of $350 or more, I have to get out of at least one contract, making it an actual loss but reducing the risk of bigger loss.
  4. Max. time per position:  When a position takes more than 30 minutes, it is time to try and get out of it, even if that means actual loss.

 

Trading Limits after Major Losses

  1. After a day of major loss ($1000) I need a time of cooling:  The next day I can trade on only one contract.
  2. If I lost aslo on the next day, I should take a day off from trading.  When I get back to trading I should do it gradually (one position of one contract the first day, max of two positions with one contract each the second, etc.)
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14 Comments »

  1. Pingback by Money Management in Day Trading — August 12, 2010 @ 9:54 pm

    [...] My Futures Trading Rules [...]

  2. Comment by angela — April 6, 2011 @ 12:37 am

    Hey Deb. I enjoy your blog. You state in your rules that you suggest education/courses/mentor. There are so many programs out there….may I ask, what mentors/programs/books of study you focused on to establish your educaiton on patterns, entry/exit, indicators, time frames, etc?

  3. Comment by Deb — April 6, 2011 @ 7:01 pm

    Hi Angela,

    Welcome here.

    I took a few lessons with Geva Gazit. He teaches in Israel, so it probably isn’t relevant to most of my readers. I have also mentioned here a book I read – The Minds Game by Zvika Bergman and Arnon Schachar, also in Hebrew. I like to read Ilan Levy-Myer’s articles (I summarized one of his articles in my post Money Managment in Day Trading). I read his articles in the Cannon Trading Newsletter.

    Another interesting person to follow is Markus Heitkotter from Rockwell Trading. You can find in his website a free course for futures trading in pdf format, and a complete video course.

  4. Comment by Best — May 14, 2011 @ 10:59 pm

    Thank you for the resources. You have so many great minis and so amazing web page! Wish you all the best in the future.

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  6. Comment by Danika — March 31, 2012 @ 4:36 pm

    These are some useful guidelines especially for newbies like me
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    Hi! I’ve been reading your site for a long time now and finally got the bravery to go ahead and give you a shout out from Huffman Tx! Just wanted to mention keep up the fantastic work!

  9. Comment by Deb — December 3, 2012 @ 5:15 pm

    Thank you for being brave! It sometimes gets lonely here!

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  11. Comment by Deb — April 22, 2013 @ 4:53 pm

    Of course you are welcome to quote my articles if you provide credit and backlinks. Thanks for asking.

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    Of course you can. Thanks for asking.

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