Trading Plan Summary –
Trading EveryDay
Leroy Rushing
10/4/2008
Trading EveryDay
LEROY N RUSHING JR
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Trading Plan Summary – Trading EveryDay
Leroy Rushing
Trading Plan Summary
2008
1) Pre-Market Analysis – [Overall Market Gapping Up/Down]
Futures
Stocks
Review daily E-mini Futures Nasdaq, S&P, Dow,
& Russell E-mini Futures contracts candlestick
Review stocks from Top 25 lists that are gapping
up/down (at least $0.50+ / 1k+ shares)
Identify stocks with most significant shock value to
supply/demand on daily charts.
charts.
Using multiple timeframes (for example, 65/15/5/2
Add stocks to watch list.
minute) and a top-down approach,
Start with the daily charts by looking for candlestick
chart patterns to support or not the trend direction.
Shock value (i.e., look for “significant” candlestick chart patterns using multiple time frames)
Bull / Bear Trap Plays (Daily Charts)
Bullish / Bearish Gap into Prior Bar (Engulfing Patterns)
Use “2 & 5 min Charts” first 30 minutes
Trend Continuations/Reversals (2 & 3 Bar Reversals)
Countertrend trades should use a Scale-in (i.e., Probing) method for entries.
2) Momentum & Scalp Trading
Using watch list of 10-15 NASDAQ stocks, look for stocks that mirror the NASDAQ, S&P, Dow & Russell E-mini Futures
contracts on 5/15 min charts w/ patterns for momentum trades or with ANY shock value. (possible countertrend trades)
Buy stock setups when stock above r20ma and r200ma and
Short stock setups when stock below d20ma and d200ma &
E-mini contracts above r20ma
E-mini contracts below d20ma
3) Mid-Day Doldrums
Continuously review “Gap list” and look at “30 min Breakouts” indicators on stock list
Limit trading to managing existing trades; unless “strong” trending market (Stages 2 or 4) exists; supported by market
internals then Use 15 min charts with mostly non-overlapping candlesticks
Buy Stage 2 “clean” higher lows setups
Short Stage 4 “clean” lower highs setups
4) Late-Market (Final phase) Trading
Review following scans for setups: Daily “Gap Plays” and primary “Watch list” lists for potential late day breakouts &
Review 6 / 15 / 30 min Breakouts for stocks continuing to trend with momentum or with Shock Value
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Trading Plan Summary – Trading EveryDay
Leroy Rushing
Trading Plan Summary
2008
5) Setups, Patterns & Targets Use 6 / 15 / 30 min High/Low Strategy:
Buy on p/b when stock breaks 30 min High & above 20 MA
Short when stock breaks 30 min Low & below 20ma
r20ma > r200ma or r20ma & extended below 200ma
d20ma < d200ma or d20ma & extended above d200ma
( W – pattern)
( M – pattern)
Buy stocks and Options (Calls) when transitioning from
Stage 1 to Stage 2 (up trending) after they pull back & retest
minor support of Stage 1 breakout;
Short stocks and Options (Puts) when transitioning from
Stage 3 to Stage 4 (down trending) after they pull back &
retest minor resistance of Stage 3 breakdown;
Wait for retest of minor support and Buy Signals for entry - Target
previous high for profit taking
Wait for retest of minor resistance and Sell Signals for entry - Target
previous low for profit taking
6) General Trading Guidelines: Only use the following as a part of trading:
Never enter stock/option position unless entry, trailing stop, and target are known in advance.
Before entering any trade, confirm what Market Cycle Phase Stock and Futures are in.
Three (3) day sell rule on any positions that don't realize any profit. (No exceptions)
7) Money Management:
Use the money management calculator to determine the share size for each stock trade
For options, never purchase more than 10 contracts in any one position / account
Use “scale in” strategy to enter all positions; maximum of (10) contracts on initial entry
Losses
Profits
Never trade stocks that have an average daily volume of less
than 500,000 shares.
As a stock/option trade is executed, a trailing stop loss must
be established based on Buy setups or Sell Setups pivot and
never decreased.
The maximum loss per trade on stocks shall not exceed 2.0
% of the total working capital.
Once a stock trade reaches 1/2 the profit target, move stop
loss immediately to breakeven.
It is understood that losses are an unavoidable aspect of
trading and should be considered nothing more than the
cost of doing business. The operator will strive to maintain
this objectivity at all times.
Consistently focus on trading habits, small trading profits is
the ongoing goal. Attempting to hit homeruns will continue
to lead to strikeouts and failure.
Must contribute 10% of all profits to the insurance policy
fund for catastrophic losses.
This plan is a living document and it is expected to change
over time as the operator becomes more proficient.
However no changes are to be made on the spur of the
moment, during the course of a trading day, or while the
operator is holding a position.
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Trading Plan Summary – Trading EveryDay
Leroy Rushing
Trading Plan Summary
2008
The following Descriptions of Error should be used to evaluate violation of the trading plan outlined above:
1. Taking illegitimate trade pattern
2. Ignoring greater market trend
3. Pre-empting entry
4. Hesitating on entry, then chasing
5. Improper position sizing
6. Improper placement of stop loss
7. Violating stop loss
8. Pre-empting stop loss
9. Failure to use trailing stop
10. Improper placement of targets
11. Taking profits early
12. Averaging down
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