2014年12月25日星期四

Trading Plan for 2015

As it is close to the end of year. A plan will make me continue improving my skills for next year. Risk Management will be the most important part of the plan. The plan and rules can be modified, but only serious analysis of past tradings, back testing with new knowledge can do it. By place single trading, I should never question or second guess my rules.

[Strategies that I will follow]
(1) Momentum Burst Anticipation for short time swing. (good level)
(2) EP for longer time swing or position trading. (beginner level)
(3) Stockbee Lemonade 401K. (try to kick off this one some time when market correct to extreme, if happens in 2015, then be it. Details in 401K plan)

[Brokers]
(1) Interactive Brokers
      - Have moved all my trading accounts to IB include Roth IRAs, managed by "Friends & Family Account". Mix regular and IRA together makes it more complex to short though.
      - Mobile TWS does not support most group/allocation feature shares will be allocated to each account based on available liquidity.
(2) Fidelity
      - for my 401K account, did not have a choice.

[Tools]
(1) TC2000
      - V12 for daily use, cloud based but only 500 bars
      - V7 for long time analysis, it stores 40 years of daily data
(2) Finviz, Zacks
(3) Should try to develop or found some tool to extract earning and other useful information in one shot. Market Smith is too expensive.

[Risk Management Rules]
(1) Momentum Burst (use % Risk)
      - if primary trend in confirmed bullish: risk 0.5% per trade, each position should be less than 30% of total account to survive from unexpected disaster. Holding time will be 3-5 days.
      - if primary in the range market: use 0.5% to calculate positions. Half the profit target to increase success rate in difficult time, actual stop-loss is also half to keep the rewards/risk ratio. Holding time will be 2-3 days.
      - stay in cash (as can not short in Roth IRA) when primary in confirmed bearish phase.
(2) EP (use fix percentage)
      - 2014, most loss is here risk too much on EP. Before my skills improves, risk should be well managed. 10-20% positions for EP based on the catalyst. Making money is NOT priority now. 
      - focus on growth stories, and/or maybe turn-around/cyclical stocks.
      - focus on EPS + Sales >100% kind of strong catalyst.

[Macro-level Discipline]
For swing trading, I need to take 300-500 tradings in a bullish year to significantly change my account. That is around 2 new position per day by average. But when market stuck at range, and breath is not in favor, I should reduce my exposure by risk management rules and also reduce trading frequency by average 1 new position per day.
    If market is not in confirmed bearish, I need to take opportunities every day. Sometimes there are 10 tradings fail in a row, but 11th turn out to be a winner and will bail out all previous 10 loss. Market timing is based on object breath indicators, not my emotions. Do NOT let recent fail/winning tradings bias my situation awareness and stay in macro level discipline (By doing daily homework, by trading setups seems to be part of my nature now).

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