Day Trading Systems

05. Jun, 2010 1 Comment

As in any business you must have a system to be successful. We have seen that with franchises systems that continue to grow by individuals investing money into them. Without a system its very difficult to be successful in business, trading, or anything you do. Systems help keep you organized and disciplined in reaching your outcomes.

I started out day trading an S&P e-mini black box system back in 2000. It was pretty simple where it basically told me when to buy and sell. Some days were good and some days were bad. It didn’t end up working for me because I had no idea why I was buying and selling. However, in the process I did learn to read charts and follow the markets.

I then started investing in educational and mentoring programs again trying to learn other people’s systems. Again, I was picking up new tools and strategies yet still unsuccessful. I fell into the trap of believing that someone else’s system was going to make me rich and I could cut corners to trading success. Over the years having spent thousands of dollars on many different programs, trading different markets, and losing money I gave up day trading since I was making good money in other ventures where I could replicate my system for business. Yet in the back of my mind, I knew I still wanted to day trade because of the freedom it offers.

I have traded stocks, options, futures, and forex. Eventually, I decided that I will focus on the S&P emini futures. I decided to incorporate what I have learned in my own businesses to create my own trading system that fit my personality. I decided to focus on the emini because it’s just one product and market. Whereas stocks and options it’s endless and so is the analysis in regard to thetas, deltas, etc. With Forex there are several currency pairs, yet I felt it didn’t move as quickly as the emini. My basic approach was like opening a store where I was going to buy and sell one product and that was to emini. As I gained experience and success I would expand my stores (adding more contracts).

Next step was to learn technical skills. I researched many successful traders and educational programs and found several tools that certain traders were consistently profitable in the long term. It wasn’t about just two lines crossing, it was more in depth about developing a methodology that fit my personality. Finally, trying different software programs I found one tool and platform that has significantly changed my trading. The following is the breakdown of the tools I am utilizing:

Long Term and Short Term market volume studies
Market Profile with “at-price” volume histograms
Bid/Ask spread volume bars
Proprietary “Deceleration” signals to tell me when buyer stop buying and sellers stop selling

These unique and informative studies combined with simple trading methodologies have dramatically changed the way I analyze the market. More importantly I have learned to trade with more certainty.

The unique tools I have learned and incorporated with informative studies have also helped me in the following additional ways that can be used to trade any futures market: