Friday, May 8, 2009

Market Tao: Rules List

Version 0.2.2
This list of Market Tao (definition) trading rules is a Beta release.
I'll update it from time to time, adding my findings and (maybe) yours. (please help)

- Use stops or carry the memory of a bad trade, possibly indefinitely
- Update the stops to protect profits
- Trailing stops work well in certain situations
- Never hold over earnings
- Bollinger Band Sell signals take precedence over the Advance/Decline indicator on shorter time periods

- "Stop to buy" is risky but can keep you from missing a rally
- If your entry is late, don't
- Go long or short depending on the 50 day (50 hour?) Moving Average direction and/or the 60 minute SPY patterns
- Daytrade long or short depending on the Advance/Decline indicators (Price and Volume)
- Look for price patterns and volume to indicate a developing trend
- The Adv/Dec line takes precedence over MA signals on shorter time periods
- Buy high. Sell higher
- Never buy on a declining Tick
- Watch for Trade #1 setups, but maintain Situational Awareness (many timeframes)
- Watch for 50 MA crossover setups
- Watch for Trade #3 setups that conform to the 30 minute gap strategy
Hey, What happened to Trade #2?
- When The Stars Are In Alignment, bet the farm (briefly)
- Make four Watch Lists and use the appropriate one
- keep an eye on the Bull/Bear Index and/or the alternate Bull/Bear index

- Why stocks?
- 3x ETF's make/loose more money than 2x'ers for the same time period. Some days they can move 25%
- Since ETF's are watered down by their sheer volume of members, individual stocks can make better short term investments.
- The Tick chart is important and responds much faster than the Adv/Dec line
- Win or loose, get over it
- Take care of the personal needs

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