The rule of ten: A trading plan

You are a rank beginner and you have no idea how to start trading. This is my advice on how to get started. The first step is to trade on SIM only until you unlock the following achievements.

The rule of ten

1. At least 10 points every week
2. For 10 consecutive weeks
3. With at least 10 days of no losing trades
4. At least 10 consecutive winning days
5. Biggest losing day at most half of average winning day (i.e. if your average winning day is +2, your max loss day should be -1)

All the above proves is that your technique is right. You should now start trading real money. You will probably start to lose money right away. That's ok, because you know that your technique is right and you only need to work on your emotions. If you are entering a lot more trades per day than you would mark on the chart at the end of day, then you have to work on your emotions. Eagerness and impatience are signs of a losing inexperienced trader. Caution and patience are signs of an experienced winning trader. When you feel any urgency to enter a trade mark that on your chart and see how it went at the end of the day.

My best trades are A2, W1P, DP and fBO. You should start with A2 and stick to A2 only. Why? Because trying to trade W1P may trick you into seeing reversals everywhere. Similarly DP and fBO may trick you into seeing breakouts and failed breakouts everywhere. With A2, there is a very good chance the trend is going to continue.

Trading SIM is like juggling 4 flaming knives while riding a unicycle. Trading real money is the same, except a monkey sitting on your head and messing up your act. So the first thing you do is juggle only one flaming knife. A small one. That's A2. The next thing you do is get off the unicycle and stand on firm ground. That's basically watching only one chart, either the regular trading hours or 24 hour chart and nothing more. There really is not much you can do about the monkey, just hope he gets older and calmer with time.

Once you consistently make money with A2 and satisfy the rule of 10 with real money, add W1P only to SIM until rule of 10 is unlocked for it. Then you can trade both with real money. Then you can add DP to rule of 10 and finally fBO.

At this point you should be catching most of the big moves of any day, dont worry about any small moves you have missed. You can't hope to catch every move with high probability.

Finally you can choose to add the following: failed first channel breakout, G2, 1st pullback of the day, first reversal of the day, L1 and H1 on hard trends and expanding triangle.

Note that having a lot of trades in your toolbox is not the important factor. What is much more important is how consistent you are with any given trade.

Update: Trading plans for most trend types.