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2006issue C071-4

A testable intraday procedure from setup to stand-down

A shorter hold was meant to replace multi-week dry spells with more frequent opportunities. The archive workflow still starts in cash, uses one checklist from candidate to stand-down, and sizes from equity and stop distance so entry, exit, and abstention can be judged as one procedure.

  • The stated reason for a shorter hold was more consistent income by replacing multi-week dry spells with more frequent opportunities.
  • Each session starts in cash, forgoes overnight holds, and treats a no-setup day as an explicit stand-down rather than a forced trade.
  • Unusual activity only finds candidates. A name is traded only if it is clearly trending, the stop is tight enough for a useful size, and a three-to-one hurdle replaces a price target.
  • Position size is a percent of equity divided by stop distance, which the archive contrasts with equal equity splits so risk can stay the same or lower while using full daytrading buying power.
Entries in this reading3 entries
Current trackExpected value40 readingsPre-trade checklist46 readingsTrading psychology process58 readings

Why the holding period was shortened

A stated reason for shortening the holding period was to make income more consistent by replacing multi-week dry spells with more frequent opportunities.

Start in cash and allow a stand-down

The described daytrading procedure starts each session in cash, forgoes overnight holds, and treats no-setup days as an explicit stand-down rather than a forced trade.

Editorial: that stand-down is a trading psychology process, a repeatable way to turn market state, rule inputs, and execution constraints into a go, wait, or stand-down signal instead of a mood-driven override.

Select candidates with one checklist

Candidate selection is a checklist of gap names, real-time scanners, and overnight swing scans, with sector and ETF context used to decide which names deserve attention.

Editorial: this is a checklist process, a pre-trade sequence that makes entry, exit, and abstention the same procedure so a setup can be accepted or rejected before capital is committed.

Limit the chart work

Chart work is limited to 15-minute candlesticks plus volume and a few moving averages, looking for trend, narrow-range bars, moving-average retracements, or consolidation breaks.

Unusual activity is used only to find candidates. A name is traded only if it is clearly trending and offers a tight enough stop to buy a useful size, and non-consolidating screamers are passed.

Daily charts covering two or three months are used for support, resistance, and stretch. A name already up three or four consecutive days and still up is treated as a skip.

Review many names, trade few

The described screen load is about 15 charts at once, about 100 names reviewed per day, and about five trades after that review, with no entries before 10:00 and stops plus alerts handling management after entry.

Share one hurdle for size and exit

A three-to-one risk/reward hurdle replaces price targets. At twice risk, half is sold and the remainder trails, with end-of-day the default hold unless the move turns parabolic.

Position size is a percent of equity divided by stop distance, which the described workflow contrasts with splitting equity into equal parts and says can keep risk the same or lower while using full daytrading buying power.

Editorial: that pairing is expected value, a filter that sizes exposure from equity, stop distance, and a stated risk/reward hurdle so a single loss stays bounded before the trade is placed.

Treat the desk as a business

The closing advice treats trading as a business: stay capitalized, keep another income source if possible, write a plan, journal, and study position sizing, expectancy, and psychology rather than entries alone.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
10 of 22 in the Expected value track
20071-5 pp.Next on Expected valueA planned liquidity offer at the inflection pointBuy weakness in a rising market and sell strength in a falling market, with the profit target chosen before the trade is placed.
All readings on this track · 22 readings
  1. 1995A pre-trade checklist that bounds loss before the order
  2. 1998Ledger audit of exits, payoff, and overlap
  3. 1998A return-to-loss filter for drawdown-aware evaluation
  4. 2000Pair historical volatility with return-to-loss filters
  5. 2001Credit-spread construction that can fail before any order is sent
  6. 2002Evaluating mechanical systems in a traders market
  7. 2002Profitability as a bound implied by RWL and commission
  8. 2004A day-trading breakeven matrix for size and win rate
  9. 2006Sit out, size and expectancy as one procedure
  10. 2006A testable intraday procedure from setup to stand-down
  11. 2007A planned liquidity offer at the inflection point
  12. 2011A style-neutral expectancy filter for system evaluation
  13. 2011Separate buying power from posted risk capital
  14. 2012Design before you trade: testing mechanical systems
  15. 2014Ideal trader hindsight as a pretrade filter
  16. 2014When expectancy and drawdown limits disagree
  17. 2015Signal, confirm, and invalidate before the trade
  18. 2015Price the win, stall, and loss before a stock entry
  19. 2016Construct expectancy by bounding losses and winner size
  20. 2017Estimate expectancy before you accept the trade
  21. 2017Size ladder tests for drawdown caps and expected value
  22. 2017Evaluate a high-yield correlation break as one locked procedure
By fieldDecision process76 readingsBy year200687 readings
All 40 readings tagged Expected value
Also on Expected value5 readings
2015Signal, confirm, and invalidate before the trade1995A pre-trade checklist that bounds loss before the order1998Ledger audit of exits, payoff, and overlap2006Sit out, size and expectancy as one procedure2007A planned liquidity offer at the inflection point