28th July 06 - My Trading Strategy

After waiting 1.5 months, our (mine and Eric's) S&P System finally gave a buy signal for entry yesterday evening. The recommended signal was to go long @ 1277.00, with a target of 1282.00 and stop of 1272.00.

A pity, the market only went to a high of 1281.75 (for the e-minis), one tick shy of profit. As the market came off, I advised my fellow traders to shift the stop to breakeven 1277.25 which was shortly triggered. Rule of thumb: never let a winning trade become a losing trade. For yesterday, if we had not shifted up the stop to breakeven, the stop would have been triggered @ 1272.00 later in the session.

So far, I am quite pleased with the performance of the system. Not only there's no losing trades so far, 50% of the entries actually gave 20pts within 2 days of entry with little or no drawdown. A profit of 20pts equates to US$5,000 per big S&P and US$1,000 per e-minis. Interesting, ya? Let's see if S&P visits 1295.00 by next Monday, hehe... ...

Some of you may ask, "What has the S&P system got to do with his trading strategy?" In fact, the S&P system is the pivot of my trading strategy. Although the system only generates 1 -2 entries per month, it still accounts for the majority of my trading fund's profits. In April 2006, I devised a trading strategy which would greatly enhanced my odds of making $$ consistently month in month out.

The strategy is as follows: Everyday, I trade my other intra-day systems (which will all be shared in the Trading Mastermind Programme) with the target of making around US$200 - US$300 per contract which is not a difficult task :) With these trades alone, my fund should be able to grow at least 10% per month. In the meantime, I would wait for the signals of the S&P system. When the signals come, I would go in for the kill and that possibly add another 5% to the fund. If things don't turn out well, I am still buffered by the daily profits. As such, consistently making $$ month in month out should be easier to achieve, isn't it?

As a trader, it's very important to come out with a trading strategy that works for you. As the saying goes, "Fail to Plan, Plan to Fail". If one is just recklessly trading the markets everyday, sooner or later, he or she will burst the account and be forced to the gates.

I hope my 2 cents sharings here does allow you to learn something here. I am so happy that my daily page views smashed past the 100 barrier and registered 155 impressions yesterday. Once again, thanks for your time :)