RJH Trading - Personalized Daytrading Training and Realtime Chat Services

First, I am not a scalper and do not believe that is a responsible form of teaching someone how to trade. Risking 5 ticks to try and make 3 ticks is a fool's game, and one where you need to run a 70% win rate just to break-even. Even if you only risk what you're trying to make you'll still need to run better than 55% just to break-even.

I think the best way to describe my approach would be that I try to capture the different momentum swings that hopefully occur during any given day. I don't care about the first and last 10-15%, I just want the chunk in the middle. Trade selection is based on reading the Price Action along with identifying specific chart patterns/structures in combination with logical (not calculated) support and resistance points. Some days I trade frequently and other days I do not. There are many different types of environments that you encounter and I just try to let the markets come to me.

The methods I use to enter are the same every day as are the methods to determine stops and profit objectives. But how I manage a trade or how aggressively I trade depends upon the market environment. My favorite days to trade are when the market is volatile (reversal days are the best) and we have good two-way price movement. The more it moves the easier it is to read and the more opportunities there are to profit.

As far as the much talked about "win-loss" ratio, I don't pay any attention to this as I believe it is a meaningless statistic. A trader could have 80% winning trades and still lose if they didn't manage their losers properly. I take each setup I see and then Manage that trade the best I can according to the plan for that position. I can tell you that for those months that I have "run the numbers" out of curiosity, I did have a high percentage of winning trades but this plays little if any role in determining profitability.

I've also heard many traders say that they have a specific dollar goal for each day. This makes absolutely no sense to me and is simply a losing approach IMO. I have a PLAN on how to trade every day, and that plan means I take the trades that setup and then manage those positions according to the plan. If that results in a small loss for the day, so be it. If that results in a huge gain, so be it. The key is to have the discipline to commit to the plan because I know I will win if I do just that. If instead I place my focus on what happened on the previous trade, or how many trades I make per day, or whether I am up or down for the day, etc., then I will lose my discipline and then my account.

Another popular declaration is the use of "tight stops". As soon as I hear somebody say this I know they are a losing trader. The market determines where the Stop needs to be and when we can move it - not us. Our pain thresholds and opinions play no role in this process unless you like losing.

Required Regulatory Reading
NFA REGULATIONS REQUIRE DISCLOSURE OF THE FACT THAT WHILE THESE METHODS MAY HAVE WORKED IN THE PAST, PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. WHILE THERE IS A POTENTIAL FOR PROFITS THERE IS ALSO A RISK OF LOSS. A LOSS INCURRED IN CONNECTION WITH TRADING FUTURES CONTRACTS CAN BE SIGNIFICANT. YOU SHOULD THEREFORE CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION SINCE ALL SPECULATIVE TRADING IS INHERENTLY RISKY AND SHOULD ONLY BE UNDERTAKEN BY INDIVIDUALS WITH ADEQUATE RISK CAPITAL.