Real World  |  DEC 2007

The Trading Plan by John Jay Norris

The Trading Plan by John “Jay” Norris We all know that creating a trading plan is the first step in trading. Find out how one futures trader creates a plan and follows it. Combining analytics and execution is not new for individuals or professional entities, and most companies separate the two. Many individuals lean toward one or the other, but traders must do both. Traders must be patient and disciplined and accept that they will not have a choice regarding when a trade scenario will unfold. Traders just need to be in the habit of being at their stations every trading day rested and relaxed and ready to make their moves. This plan concentrates on following all markets with the understanding that they will always follow their path of least resistance. If you are a novice, you need to do your homework and remember that futures trading carries risk of loss. HERE’S THE PLAN Prior to any analysis I need to be able to see the market on three time frames simultaneously, a tactic I was introduced to in Alexander Elder’s book Come Into My Trading Room. Once I have the three charts in front of me, I determine the long-, intermediate-, and short-term trends for the daily, 240-minute, and 60-minute charts. This is a total of nine directional determinates that I break down into a directional ratio. I record these on a simple grid with up arrows, down arrows, or a hyphen indicating neutral or sideways. Prior to any analysis I need to be able to see the market on three time frames simultaneously, a tactic I was introduced to in Alexander Elder’s book Come Into My Trading Room. Once I have the three charts in front of me, I determine the long-, intermediate-, and short-term trends for the daily, 240-minute, and 60-minute charts. This is a total of nine directional determinates that I break down into a directional ratio. I record these on a simple grid with up arrows, down arrows, or a hyphen indicating neutral or sideways.

by John Jay Norris