My trading rules as an EOD trader:
- Only take trade setups that offer a 2:1 or greater risk reward
- Only take trade setups which are in the direction of the prevailing trend
- Check for trend of main market
- check the higher time frame of the instrument
- If no trend then use other methods such as stochastic - stochastic is good for spotting potential divergence -
- also be wary about setups which exhibit little by way of a trend.
- Once a setup is activated do not place any further trades until your initial trade has completed a 100% move in
- the preferred direction taking into account your stop.
- Once this move completes bring stoploss to Buy/Sell point. (I always have stops - in my case the stoploss, risk/reward is calculated for me by the software I use). In terms of money I risk £50 per trade.
- Do not move stop again until price target is reached.
- Once price target is hit bring stop to low/high of previous bar
- If instrument is in a strong trend use trailing stop such as ATR signals as it can be that using first method will take out your trade sooner.
