Money Management Rules (NQ)- 1

We enter trades based on our entry rules discussed in a previous post.

We begin with building a buffer for the day, taking 1 to 2.5 points on the NQ, attempting to accumulate $100. Then, we go from taking 1 to 2.5 points per trade to taking over 2.5 points. We move our stop from below/above swing points to 1 tick above entry. BUT we need to build up the profit on the day before we start trying to catch the bigger moves.

Money Management Rules for NQ:
- Max loss per day = $120
- Max loss per trade = 16 ticks, $80
- Never adjust stop against ourselves

Our stop management system allows us to usually reduce the risk of 16 ticks for the stop down to approximately 8 to 12 ticks per trade, but we NEVER take more than 4 points of risk per trade. If we amount to $120 in losses in a day, we stop trading for the rest of the day. We feel that psychologically a trader will make bad trading decisions and increase this loss even more, so the best decision is to stop trading, analyze the decisions made to amount to the losing day, and prepare/improve for tomorrow with the newly acquired information.

Happy Trading!

HT