With the markets not reacting to the MACD negative crossover as we had anticipated I thought that I might bring up some trade strategies that would limit your risk. Steve was posting last week that when he would look to enter a position that he would purchase One sacrificial contract. When dealing with an Expensive contract price that is a Good idea. If the trade looks to be a Good one then contracts can be added as the markets move in your anticipated direction. If it is Not a Good trade then your risk has been limited and you can look for the Correct entry point. For anyone who is just getting used to using the Plan I would strongly suggest limiting the number of contracts for each trade or perhaps just paper trading until the trade triggers become familiar. Remember, if you miss a trade trigger, or feel that it is unreliable, just be patient and Wait. The Plan will generally have at least two trade triggers a week. If you miss one there will always be another.
Remember to follow Bernard's favorite phrase "Befriend the Trend". That has especially been True since the Plan went Bullish after the Dow Held Support above it's 320SMA. We might not be getting a complete reversal of the markets but making sure to trade in line with the Plan and the short term Trends should help to make for the Best trades.
Make sure to use some type of stop loss order. I am very bad about just using a mental stop loss and not sticking to it. Alexed has pointed out some good stop loss strategies and they should be followed. The markets can be unforgiving to any trades that are on the wrong side of the markets movement.
Make sure to learn the trade triggers that the Plan is looking for and how the Plan philosophy Works. Trading Against the Plan will Most often result in a Loss. Using the stop loss orders and limiting your risk on a trade should help to protect for the instances when the Plan triggers are incorrect or the markets fail to react to them.
If anyone has any further comments on how to limit risk, losses or interpretations of using the trade triggers please feel free to post them. With continued input we should be able to make the Plan more reliable and profitable.
Good Luck to All! :^)
PLAN the TRADE and TRADE the PLAN!