Trading Plan Analysis and Optimization (A long form set of posts that might not ever end and will have no routine schedule.)
The goal of establishing optimal stop loss levels and maximizing profit targets with a modified volume profile trading strategy.
Believe it or not, since I opened this thing up in 2021, I still have my first 21 subscribers still present in this Substack. I am grateful for that. Most of them are traders like me. This post is for them and for a few who are interested in what I am doing. It may just bore the living hell out of most of you, but I am doing this, if for no other reason, than to have it recorded somewhere. I am going to outline how I streamlined and continue to streamline my index futures trading strategies to optimize stop losses and to maximize trading profits before exit. The purpose for that is to scale investment capital back to the time before I began investing in start-ups, something I was far more unsuccessful in doing. I also created a stream of steady income in real estate investing through hard money lending and by land investment, that died out a bit after 2021. This analysis process follows along with Steve Burns short summary he posted a couple of weeks ago.
Until 2007, I was primarily an investor who would swing trade stocks ONLY from the bullish side. The reason I did that is that I hated margin rates and I truly detested borrowing stock, which sometimes could be difficult to do.
In 2007, I began to find that liquidity in stocks began to get weirdly inconsistent, so much so that I had to widen stops on the swing models I created with NeuroShell Trader Professional. In that same year, I decided to devote some of my time to trading index futures and cash forex.
When my gig doing radio commentary (and via podcast) ended in 2010, I continued for two more years to run the now defunct “The Buffalo Trader” blog with my daily screening of 8000 stocks by sector and pattern, but I used most of my trading energy on futures. I also got deeply involved in tech start-ups that I understood well, mostly service or couponing operations. It seemed to offer the better payoffs, though in the end, disagreement between partners killed three of the four off. The other, a direct investment in a very successful technology, is being litigated currently as the company I invested in has had its licensing agreements violated severely. I will not address here why I did not expand the screening service I did into a paid-full-service screening research company. That may come at another time, but not here.
Though the items in Steve Burns’ post are primarily about items 3 and 4, I will also discuss why 1 and 2 can be optimized even more when items 3 and 4 are dealt with. Most traders and even investors do not deal with item 4, when it may be the most important aspect of everything they do to make money.
The next post, which I will hopefully have completely outlined by Wednesday, will show you how successful Friday’s trades were, but even MORE importantly, why not holding onto it (something evident in the volume profile) was a big mistake because of all that I left on the table. Stay tuned.