Mastery Program Module Four
Mastery Program Module Four
Mastery Program Module Four
Section Four:
The Trading Plan and the Game Plan
Part Four:
Trading Strategy
in multiple
time frames
candles
moving weekly
averages
trend lines
• Simply put:
1. Money management is how much capital you are going to
put at risk for each trade.
2. Risk management is how you will put that capital to work
regarding trade management and share size. (this is your
trading plan)
• Good trading creates income, good trading with proper
money management creates wealth
1. Multiply equity balance x 2%. This will give you maximum dollar risk per
trade.
2. Determine the difference between your stop loss point from entry price.
3. Calculate position size:
• Maximum dollar risk per trade divided by the difference between the entry
price and stop loss point.
• The beauty and simplicity of this method is that it completely neutralizes
the volatility of expensive stocks that can move quickly.
• Whether you are trading a $15 stock or a $150 stock it doesn’t matter! You
are risking the same dollar amount, the risk amount and stop loss will tell
you how many shares.
Leaders within
Order Flow
Industries those industries and
Significant levels
Sub groups within sub groups
Probability
those industries Volume and intraday
Best idea
“trade-ability”
• Is this a good idea right now? What would make it a great idea?
• Has volatility changed? How do I know this? How do I plan for that?
• What Macro news do I need to know?
• What sector related news do I need to know?
• How did the market trade over night?
• Where do I expect the market to open today?
• What do I Plan to do if it does or does not open as I planned?
• I will buy a test of the two day low in the morning. I expect this to
be support.
• The stock has been up four consecutive days and is coming into
resistance. I will sell short if the resistance holds on the open.
• Volume breakout from consolidation today, I will expect follow
through tomorrow.
• A melted candle formed in this stock today after a three day
pullback, I will trade it long above the opening range tomorrow.
• Relative strength play: I will look to short these stocks tomorrow if a
weak market or buy these if a strong market tomorrow.