• To generate superior risk adjusted returns that are uncorrelated with traditional long investments.
• To gain a comprehensive understanding of market fundamentals and market drivers.
• I enjoy visually identifying market patterns and verifying them with quantitative formulas. Thus, I am able to isolate, and subsequently use, my strongest aptitudes enabling me to enjoy my work with reduced stress.
• I’ve identified a career that is intellectually stimulating, ensuring I will not get bored with my job and control the burn out rate.

• I construct, manage, and execute trading strategies through a commodities and equities portfolio by identifying short and long-term trading opportunities based on micro and macro fundamentals, paired with proprietary technical indicators.
• I evaluate and monitor intraday and long-term volatility through standard deviation models and exploit these opportunities using flat price and spread positions.
• A basic version of my procedure is as follows:
  • Identify which of the “Six Market Conditions” we are experiencing / trading in.
  • Pair these market time frames with daily, weekly, monthly, and quarterly trends.
  • Execute pre-determined strategies to match up with the aforementioned time frames, conditions, and trends.

• PnL Rules
  • Max Up Day > Max Down Day … (or 1 : 1)
  • Number of Up Days > Number of Down Days … (or 1 : 1)
  • Average Up Day > Average Down Day … (or 1 : 1)
• By using the aforementioned rules on a Monthly, Quarterly, and Yearly basis, I can ensure my risk : reward ratios will provide a profitable strategy.
• PnL metrics (percentage returns, absolute values, etc) are dependent on account size.

• I capture moderate price movements in either direction by identifying short, medium, and long-term trends in various markets.
• I take calculated risks in said market conditions and adjust my risk : reward ratios / absolute tick values based on market volatility and range.

• I apply my model to a strategic basket of futures markets:
  • 65% bias towards the crude oil and crude products fundamental suite (CL / BZ / HO / RB).
  • 25% bias towards equity futures (ES / YM / NQ/ RT).
  • 10% bias towards “outlier” futures / any available market (GC, SI, ZB, DX, etc).

• Returns are realized in three different time frames:
  • 0 min to 30 minutes (70% of trades)
  • 0 min to 23 hours (20% of trades)
  • 0 min to 3 days (10% of trades)
• Most positions ( ~85%) are closed out by end of day.
• In order to avoid the necessity of a large futures account requiring excess margin capabilities, we keep most overnight positions under 2 lots per trade.

• Breakouts: Sell into new lows or buy into new highs.
• Return to the mean: In an uptrend, when the market sinks through the day’s volume weighted average (VWAP), look for the market to turn up back to the WVAP (vice versa in a downtrend).
• Reversals: When a market is overbought, look to take the market back lower with 10% to 25% of the previous trade size (vice versa in a downtrend).
  • Only take reversals when I have profited from the previous breakout or daily trend.
  • Note… The risk : reward on these trades are very large as the hit ratios are low.

• When entering a position it is essential to properly analyze all applicable technical and fundamental indicators before putting on a trade. Depending upon the circumstances, the value of one indicator may trump the value of another indicator, so learning how to distinguish and choose correctly is what sets the successful trader apart from the novice. Learn how to identify these circumstances and adjust your entry methods accordingly. An example is below.
  • Enter in front of support / resistance levels. Use the following S/R methodologies as listed below (listed in order of importance).
    • HVA – High Volume Areas
    • Swing High / Lows – Recent areas where the market has turned
    • Benchmarks – Rounds numbers where the market is naturally drawn too
  • Use a suite of technical indicators…

• Exits will make or break a trader – it is key to establish an exit strategy for each individual position prior to entering each trade. A hallmark of a successful trader is the ability to view exits from multiple time frames and multiple market scenarios. Below is an example.
  • Reduce position by one quarter (or one third depending on scalability) after the trade has moved 33% to the target.
  • Reduce position by one quarter (or one third depending on scalability) after the trade has moved 66% to the target.
  • Reduce position by one quarter (or one third depending on scalability) after the trade has moved 100% to the target.
  • If the trade still has one quarter of the position open (trading with 4 lot mult vs 3 lot mult) set the last exit “far away” at the next HVA and use a trailing stop.

• I take a two pronged approach to risk management.
  • First, risk is managed on a per trade basis.
  • Second, risk is overlaid into a comprehensive risk model considering the whole portfolio.
• Finally, I run a proprietary Portfolio Exposure Analysis across each individual trade, and view this on a total exposure basis.

• Personal Inventory: Assess my psychological and physical health going into the trading day.
• Market Inventory: Read all market news, fundamentals, CFTC specs, Open Interest, Financial Reports, Trade Journals.
• Trend Inventory: Quantify the current, overnight, weekly, and dominating trends. Do these match up with my bias?
• Review recent successes and identify what I plan to repeat and write down what I need to improve on and how exactly I will do so.

• Review all trades and fill-out my Daily Trading Journal.
• Practice one hour of yoga.

Look at overnight, weekly, and monthly levels of standard deviations to ensure the market can provide acceptable risk : reward with my various strategies.

• Sierra Charts
• CFTC Reports
• Schork Report
• Reuters: Inside Oil
• Twitter

I have developed a comprehensive Trading Journal where I record a plethora of information for each trade. These data fields include (but are not limited to): entry method, exit method, pertinent technical indicators, price action, swing high / lows, fundamental bias, etc…

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Psychology is perhaps the most important factor in trading and what separates successful traders from the rest of the pack. The attributes of good trading psychology are developed over time, and are something a trader must possess to achieve consistent results through discipline and planning. Traders must come in with the correct frame of mind day in and day out – if they are carrying over emotions or distractions from other aspects of their life, this will typically be brought into the trading day as well. And it will affect their judgment! In order to achieve stability, it is critical to learn how to establish a balanced lifestyle that allows you to stay fresh and focused and to ensure your longevity.

• Look to hit singles and doubles. Don’t press unless there is a huge breakout caused by NEWS.
• Take a sniper approach with the recent wide ranges and be comfortable / patient inside volatility and chop.
• In a trending market with wide ranges, be patient on exits and hold steady at targets. Stay active with exits but only by 2/3c.
• Don’t exit trades early. ESP small size trades in RB, HO, ES, YM. Use a time stop of 15 min on larger positions and then reduce ITM.
• When looking to take a position in equities… Take a comprehensive evaluation of which equity market has the most favorable stop / loss level vs current price… i.e. … evaluate ALL applicable charts.
• Flat is a position too.

• Money Management:
  • It is critical to learn how to trade with the proper lot size that fits your account size. Traders must be properly leveraged so if they have a bad day they will still be able to trade tomorrow and the next day without worrying about an enormous draw down in their account. We help coach you in learning how to cut off your losers and let your winners run.
• Market selection:
  • Are you trading the right market? Successful traders consistently analyze the risk/reward opportunity in the markets that they are trading. What is the volume, volatility, and trend? Traders need to evaluate when the market they are in has a little, or a lot of opportunity. We work with you to help you learn how to adjust your market selection accordingly.
• Sample of specific rules:
  • After a losing trade (or a BIG WINNER), flatten up and take a beat in order to step back to re-evaluate. Do not simply jump back in as momentum was lost.
  • Stay relaxed and follow the plan below. If you notice a mistake / error, correct it immediately and do not repeat.
  • Do not add to positions while the market is drifting. ONLY add on a flash up or down. Note: If adding to an existing position keep stop / loss in place – at the same level – do not move.

• As Benjamin Franklin said, “Change is the only constant in life.” Thus, if you fail to plan in a market that changes, you only plan to fail. Let’s get planning.
• Michael Jordan’s greatest talents excelled under Phil Jackson. Correspondingly, novice to experienced traders realize exponential success with the right mentor. Don’t trade in a vacuum.