Jack’s Trading Plan
I trade because I am an independent person at heart, and I absolutely love the idea of making my own hard work turn into profits on MY terms with MY rules. The money is great, and the journey of perfecting my own personal discipline is extremely rewarding. Remember, most things that pertain to trading pertain equally to life.
I am fairly conservative 99% of the time, and I come to other traders as a teacher, therefore my mission is to shorten the learning curve on how to trade (I want to minimize pain and hard lessons for others). With Micro-Futures in a small account ($5K or less) I trade only three contracts and sometimes even two. However, the market is always changing and there are appropriate times to add more (4-5), but still with stop-losses and targets. I use the Market Internals and three different time frames to start with a basic plan. I look at the overall volume and search for unusual activity, especially if it’s in e-commerce, semiconductors, or streaming (any new groundbreaking tech companies as well). I specifically stick to names I have been trading successfully. I also have a no-trade list that includes names I just never ever really want to trade.
Monthly: In a $10K account trading E-micro’s only, I want to make sure that I have at least $2K (minimum) of profits a month. However, if I have met my daily Micro-futures goal of $100-$250 a day, that number should be significantly higher. Sometimes the markets can be ugly and E-micro’s profits can be stagnant, and I may see less than $1,000 in profits per week, it really comes down to change in volatility and more popular major earnings announcements. Regardless, I am certainly not “down on myself” if it is a less than average week.
Long Term: I want my first million dollar account within 3 years. It is doable, and hopefully if market conditions are right, this can be achieved.
E-micros: The 1, 5, 15 minute charts for context and direction bias (specific to the 5 min), while using the hourly to look at globex highs and lows from the overnight extended trading hours.
Options: I do it all. But I prefer to trade momentum on the short term from an hourly chart with a Squeeze. If I am trading into earnings, I am buying long calls or selling put credit spreads two weeks before the announcement.
For options mainly I sell put credit spreads or buy a 1-hour Squeeze with long calls (typically Delta 60 or really aggressive at Delta 40) and typically 30 days out if I plan on holding through the week into next. I also love pinning butterflies and unbalanced flies if the duration of the trade is longer than a Friday expiration. I love Iron condors, at least “the concept” but I found I am not patient enough and just don’t want to take up more psychological capital than needed. I trade a reversion to the mean on a 5min chart for Micro futures. Green or red 10X bars are very helpful when I have a Squeeze because it really shows me more directional conviction.
Stops are based on P/L. I do not usually like to be down more than $300 on a position in a $10K account (circumstances change a bit on this based on time duration and what timeframe I’m trading off of). Stops on E-micro’s are based on 2 ATR (average True Range) from the 5min, and typically are wider if the /MNQ for example is extremely volatile. I try to preach looser stops on Micro’s due to liquidity breaks that end up retracing quickly.
In micro-futures I use Keltner channels (3 sets) to give me average true range. With options, I am more of a volume and momentum guy, so if it is calls I typically take profits at 61.8% or 127.2% extensions and in some cases will let it ride. If it is a defined risk trade I am typically looking for 40%-60% profit. If the trade goes my way early, and I have reached that goal unexpectedly before expiration, I call it a winning trade and get out. I am an intuitive trader, my profit taking strategy varies widely - my position size does as well, but I never over-position. This means that I am hardly ever risking 20% of my account.
10% of the account only if I am catching the early part of a momentum trade that looks strong and will have stops. Other than that, I keep it pretty small and typically 5% for small durations trades within the same week. For longer term trades that might be a month out (FCX, GLD) I might start out aggressive and add more on small pullbacks.
Above all else… HAVE A ROUTINE! For some people this may be a ritual. Over time I have found that it really does not matter what you do as long as you know your rules everyday. Make your routine very normal, but easy. A good example would be making coffee and getting ready for the day at 5:30am. For me, it is feeding my cat and spending time with her out on the patio, then I go to my desk and start analysis or any research to be done for the day. Remember, very normal - but easy.
I work on passion projects, read, listen and/or make music with my synthesizers. I have a rare form of synesthesia, so the frequency that synthesizers make really relaxes my body and mind. I am typically making ambient music or lo-fi synth-waves even though I am classically trained in the piano. I love the haptics and teamwork of gaming, and I get a lot of my social activity playing with a tight group of competitive gamers in the evenings on some days as well. YES, I have a life too.
Think or Swim for Charting, Top-Step for trading and trade-tracking, and a simple journal to write down thoughts - even if I will never look at it again.
Most of my journal is scribbles and notes of things that I am technically not writing down to look at later, but rather I am writing it down to burn it into my memory, if that makes sense. My written trading journal is a classic mess with notes and arrows and quotes, anything really from the day. I honestly also feel like journaling about emotions is way more effective than writing about stocks and trades. I am not an engineer. I have a degree in Psychology, so organization is something I leave to TastyWorks and Trade-Station in my activity log, and typically you are a right-click away from saving it as an Excel file, so thanks a bunch Bill Gates, weirdo.
I derive as much information as I possibly can through absolutely everything. I am typically really early, which is kind of an issue. 🙂 I typically see what everyone else is talking about on Twitter to see if they are onto something I am onto. Let us be honest, Twitter is a great resource for market research and we ALL do it and nobody says it, so it must be true! Tweet Tweet!
Trade as if my wife is always watching and do not be a contrarian - Hard-Stop.
- Do not overposition
- Do not chase
- Enjoy your JOMO
- Know that cash is a position
- Don’t try to get rich quick
- Go on vacation
- Take time to be outside
- Never forget your health. Your body and mind deeply influence your process. Working out and cardio are great, “move it or lose it” applies to the body. Meditation and space to be able to jam out to your music applies to the mind.
- *I am also an avid gamer so I do that to decompress, though I still have to watch my time on that because it is more screen-time, which is not ideal.
- GO ON VACATION