Getting It On

The most important part of trading is getting the trade on. To make sure this happens, I have a detailed trading plan (TP). My trading plan has evolved over time and is still evolving. I make tweaks to meet market evolution too, although the basic methodology stays the same - identify the trend and trade the thrust after the pullback.


However, there are two categories of this type of trade: the first trade after a change of trend (the trend of the chart I am trading) and the continuation trades after a too early exit from that trade. The risk on each type of trade is different and the recognition of knowing when I'm wrong is different too. Stops should not be a matter of price but a matter of what's happening in the context. If price has to move too far against me before I would know I am wrong, I pass the trade.


Lengthening the CCI can help identify the trend when there is more noise (chop) in the market. Sometimes I use 90, 135, 180 or more instead of the 45CCI. Trend identification is of prime importance.