Seven Steps to a Good Trade
Have a Trading Plan that lays out the technical details of the Strategies to be played (the pattern you are looking for), with Rules to guide the Trading Idiot.
Monitor the Tape — Look for one of your Strategy Setups in the Direction of the Broader Market Trend (based on Pivot Pattern and 20 MA). When given a setup candidate,
Analyze Support and Resistance (Risk-to-Reward ratios) on all relevant time frames. Do the odds favor this trade? If so,
Consider Relative Strength and Reversal Timing. Do the odds still favor this trade? If so,
Share Size the Position to 1 Risk Unit — Never allow a failed trade to take more than 1R. Then
Manage the Trade as Planned — Enter on the Trigger and then allow the trade to advance to its Initial Profit Target or Stop-Loss Target; and if in a power trend, use a trailing stop to allow the market to reward your patience with as many Rs as it will yield. A well executed plan is the Professional Trader’s edge!
Follow Up — Document and Analyze the Trade. Learn from both Successes and Failures. Update your trading plan as needed.