DBQ's Campaigning rules v.3, 12/15/2005 (based on conversations with FL)

The objective of the campaign is to derive maximum profit per unit of risk from a swing trade. The strategy is to use entries from the 3m for reduced risk, and to build size without ever exceeding the initial risk:

Phase 1: Get the trade on
  • the base trade for this level should be a dot1 or a dot2 (3-minute chart), or any entry with an objective >10pts
  • entry is in VS window or sneakin
  • maximum stop-loss will be 3 points for ES
  • base trade size should risk no more than 5% of risk capital if stopped out.
Phase 2: Cover the risk
By the time the base trade has moved 5 points, the risk should be covered by one (or more) of these risk-control strategies:
  • Trade against the position (exit and look to re-enter at a better price),
  • Take partial profits,
  • Move the stop-loss to breakeven (this is last choice because it increases the risk of being stopped out of a good trade).
Phase 3: Press the trade
  • Work the trade according to what the market gives, by taking profits on strength and re-entering on weakness as indicated by RSI extremes
  • The stop-loss and/or trade size for auxiliary trades after a successful basetrade should be based on a calculation of breakeven including profits already taken during the campaign.
End:
  1. get stopped out
  2. continue to end of trend
  3. end it on a blowoff move before the trend ends
Multi-dimensional trading:
During the campaign a potential base trade may occur in the opposite direction. This may be taken as a separate campaign starting. Since the long campaign will trade the up-waves and the short campaign will trade the down-waves, there should be little conflict. Each campaign will follow the same rules independent of each other, so the long and short campaigns must be tracked in separate logs, and may be trading different size.