UPDATE: One of the great things about having more formal rules, is I can apply them in retrospect to charts and see how things would of worked out if I followed them 100%. In the past, I’ve looked at tons of charts in the evening but never had a real bench marking process to see if the rules would of yielded profits. I’m going to try to back test at least 10 charts a night using these rules. Following them during the day will be more about tracking my discipline in following a set of rules.


I created this little worksheet (the link should give access now) so I can manually track every trade: price and time of entry and exit. More importantly, I have all my rules laid out with spaces to check off when various thresholds are met. My main goal is to follow my rules 100% of the time, and build an unbroken chain of disciplined trading.

Today, with my PEI trade, I had these rules in my head, and I found them hard to follow, especially the exit criteria. I’m not convinced these rules are exactly the best, but I can’t really figure that out until I strictly abide by them.

On another note, a reader of this blog contacted Scott at Fear and Greed Day Trader to see what happened to his blog….he stated it was a “distraction” as reported in the comments in this thread (linked fixed now).

CONTEST: I’m bummed, I had a stop loss order in my 500 fake shares of FAZ that was executed yesterday at around $37.80 – near the low of the day. Of course, FAZ exploded to $50 today. My hunch that this was going to be a “sell the news” situation once the new financial bailout plans were revealed – this hunch panned out. That’s a $12,000 difference in my contest account if I had stuck it out with FAZ. I did hedge that my theory would pan out by doubling up on my short of KEY yesterday when it rose more, and this sank over $2 today and I covered with a $4,000 profit. So this wiped out my loss on FAZ, and basically got me back to the starting gate. I wish I had more time to play in the contest, but I have serious paper trading to do!