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Prop Trading Futures

How to strengthen and expand you trading arsenal

If you trade chart patterns you should consistently analyze and keep track of those patterns that in the last weeks and months generated the best outcome out of each of trading setups. Make this analysis part of your daily or weekly routine.

By trading setups I mean the rules that you should have written down in your Trading Plan, not vague concepts or, even worst, opinions.

Your trading rules should be so detailed and unambiguous that – if given to a programmer – they can be coded. You should be able to execute your best trading setups out of your trading rules without a second guess, at any time and under any condition.

Also, what’s the best outcome that you can expect out of each trading setup shall be clear. Your trades’s best outcome can be expressed in:

  1. In visual terms. In example:  How well the chart develops to to target? Did the price retest the breakout price or not?
  2. $ or % gained by the security, if you trade stocks, for instance.
  3. $ or % gained by your trading account, if your trade FX or futures.
  4. Maximum drawdown experience after the setup was triggered.
  5. A mix of the above.

By looking over and over different best outcome trading setups, after months and months of practice, you will start to develop a sixth sense of what is working in the markets (singularly and overall) and what is not working.

Once you can do the above with the same mental effort you put to eat a sandwich (or a dumpling) then you’re a ready to expand your trading arsenal!

Expanding your trading arsenal

Are you a futures and FX position trader? Why do not add any equity swing trading or intra-day trading in your arsenal?

Are you an equity intra-day trader? Why do not begin to study swing trading setups?

Expanding your trading arsenal has several advantages:

  1. It allows diversification of trading risk and profits.
  2. It makes easy for you to adapt your trading to to your life circumstances.
  3. It forces you to learn new things and develop a deeper understanding of markets and different time frames.

Before even thinking to expand your arsenal, you should get to the point where you can play one trading style almost without effort. To get there you should start with one setup and do it over and over again. Then two setups, ad so on…