future day trading rules

看长线心得

The most important factor for middle-long term is liquidity.

So we should look at following criteria:
1. cash reserve
2. interest rate
3. inflation rate
4. economy growth

which means when there's tons of cash (held by government, companies, individuals etc), interest rate not going up, inflation tame, economy not recession, market will go up until some or more of the criteria break.

The rally from August just verified above criteria when Fed stopped hiking, and CPI, PPI below expectation.

future day trading rules

1. Gap(intraday) up/down rule: after the first relative big gap (for example, >2p for ER2), there will be a small window (usually less than 10 minutes) for trapped position to cut or for new position to setup, because most time there will be another gap after the small window. Gap means MM's action. Retailers cannot cause gap unless force cut loss.
   
2. trend line theory: when trend line break, will have big move. Either break up or down.
   
3. extreme theory: market always go to extreme, and trend days usually close at highest or lowest.
4. failed bounce/pullback theory: a failed bounce will break previous low. A failed pull back will make new high.
5. round trip: market tend to do round trip. ER2 range usually>30p
6. 11:00am spike: 11:00am(PST) program trading started to be active, usually there’s spike up/down around 11:00.
7. AH extreme: AH futures tend to go extreme due to small volumn.
8. box range: futures most time move within a box. When the upper bound or lower bound break, it move to next box.
9. neckline theory: for head & shoulder pattern, when neckline break, will have big move.
10. retest extreme theory: a generalization of rule #2.
11. No average down or average up.
12. No short before see red bar, no long before see green bar.
13. No long on resistence. no short on support.
14. Early cut rule: when you first time feel panic, it's time to close position. Dont wait to cut until you feel numb.
15. Early reversal theory: if up/down a lot in the first hour, there's big chance to reverse later. This is the exception to rule #1.
16. For big news(such as FED, GDP etc), focus on market reaction instead of own interpretion. When market goes to opposite to your analysis, give up your interpretion and follow market.

Check List Before a Trade

1. Big news out? What's the response? How about volumn?
2. Oil
3. TNX
   
4. What's the trend? --> draw up or down channel.
5. What's the resistence?
6. What's the support?
7. What's the target?
8. What's the stop?

Money Managerment are discussed here (Link) .

Thumb of rule based on Kelly criterion:

f* = fraction of current bankroll to wager;
b = odds received on the wager;
p = probability of winning;
q = probability of losing = 1 − p.

As an example, if a gamble has a 40% chance of winning (p = 0.40), but the gambler receives 2:1 odds on a winning bet (b = 2), the gambler should bet 10% of his bankroll at each opportunity, in order to maximize the long-run growth rate of the bankroll.

For even-money bets (i.e. when b = 1), the formula can be simplified to:

Pivot, Resistence & Support

Link to calculate: http://www.fxstreet.com/forex-tools/pivot-point-calculator/
Post regarding it

H = previous day's high
L = previous day's low
C = previous day's close

Pivot Point = (H + L + C)/3
Resistance = 2*PP - L
Support = 2*PP - H
Previous day's last two hour high = L2HrHigh
Previous day's last two hour low = L2HrLow

A link about bottom stocks:

http://www2.barchart.com/sectors.asp?sec=bottom~100~stocks.sec&sort=99