Trading rules for different instruments -
This is a follow up to our discussion thread on Friday about the best way to manage our trades without me having to stay glued to the screen all the time... Below is what I have finalized at..
1. For SPX related trades. We will continue to use the micro1 to guide our trades in and out. NYHL1M is context and micro1 is our trigger for entries and exits. So if NYHL1M is on a buy, and micro1 is on a buy, we go long a 2X ETF like QLD or SSO. If micro1 goes to sell, we exit. Both NYHL1M and micro1 has to be in sync for us to take a trade. Micro2 will be a separate stream and we will use NQ for trading this. You can also use an ETF like QQQ or QLD to mirror this trade if you do not have futures access. Micro2 will be a little more longer term - more of swing trading style and micro1 will be more short term - 1 day to 1 week timeframe. Micro2 can last for several weeks. Note that this area has no changes.. we have had this plan for a while but the micro2 has been sticking stubbornly to a buy which is why we don't have a swing trade in the trade table yet....even though I did post about the 7811 NQ long that I took for myself. From the next flip onward, we will have this in the trade table as well.
2. For GDX and USO trades. We will take a 25% position on the main signal for both of these. And trade an add on 25% position on the micro signals. This way, we will always have a swing position in the trade table. My high level backtest suggests that this is the best way to go so we have the best of both worlds - better returns with comparatively lesser volatility. I will check the micro signal for GDX and USO only 4 times in a day and we will have position change possibility only at those 4 times. First check at 10AM, 12 Noon, 2PM, 4PM - all EST timings. So right now USO is on main sell and micro sell. We have a 50% short position - so no changes required here. GDX is on a main buy and micro sell. We need to get into a 25% position long on Monday - and we will do this tomorrow at the open. After this we wait for the micro buy to trigger in order to add another 25% long.
So, to summarize: No changes with NYHL1M/SPX/SSO/QLD trades. Only GDX and USO.. 1. Micro will be checked only 4 times in a day. 2. Main signal will warrant a 25% position and Micro signal will drive the other 25% position.
Hope that clarifies things.. if not, ask in this thread.