Plan the Trade - Trade the Plan

If you plan to succeed as a futures or FOREX trader you need a trade plan and even more importantly you need to FOLLOW the plan. Most traders fail - plain and simple. A trader without a plan or a trader not following his or her plan is a trader planning to fail.

I have been trading for nearly 20 years and have put in the 10,000 hours that apparently qualifies me for "expert status". Over that time I have experimented with a variety of trading plans. Black Box position trading systems are but one of the plans I used. This strategy made me millions and then lost me millions. I abandoned this approach. What I learned from this was that I could not stomach big draw down.

I moved away from system (rule based) trading for some time and traded markets based on chart patterns, pivots, support and resistance and a variety of indicators. Although moderately successful this strategy did not allow me to follow several markets at the same time. I prefer to diversify my positions across a variety of markets and I was unable to monitor several markets with the "visual trading" strategy.

Only with rule based or system trading strategies is it possible to monitor the 25 futures markets and 8 FOREX pairs that I follow. I then developed my own systems using Easylanguage from TradeStation - the platform I use. However I added a couple of twists to the method that I believe are unique to me and my trading tolerance.

First and foremost I do a market analysis each week-end for all the markets I trade. All of this information is compiled into a one page report. Based on this report I determine the markets I will trade for the following week and direction I will be trading, either long or short.
Now that I have isolated the hot markets for the coming week I set up chart pairs for each market. One chart is a 150 Tick running my Direction Finder System and the other is a 10 Tick or 30 Tick (depending on the market) running my trigger system.

We put a position on when the following occurs:
1. The Weekly Trade Plan supports the Trade.
2. The Direction Finder System (150 Tick) signal is in synch with the Weekly Trade Plan.
3. The Trigger System issues a signal in the same direction of the Direction Finder. The system will be set to trade ONLY in the direction of the Weekly Trade Plan. It will close out positions and never reverse trades.

You can see several trades posted here showing the 150 Tick/10Tick chart pair with system signals.

To summarize, I only trade a well planned position. I have named the overall strategy Nested System Trading. The signal that puts me into a position must be supported by two higher authorities: the Weekly Trade Plan and the Direction Finder signal on the 150 Tick chart.

The overall result is that I generally win more trades than I lose and my losses are small (average loss = $200). I am also able to trade several markets at the same time.

My Weekly Trade Plan is currently available for free from our site. They are in PDF format - 1 for 25 Futures Markets and 1 for 8 FOREX pairs. My Direction Finder System and Trigger System are available for $795 US. We also offer a 5 day free trial.