7/22T1:24 Update R.ot R

Rules of the Road:

Day Trading...
1) Determine the direction we want to trade based on the daily charts. If the daily chart is positive than we only try day trades in the buy direction and vice verse.
2) Use the 60 min. chart to initiate the position. We must have all three indicators going in the same direction and at the beginning of the move in that direction.
3) Use the 15 min. chart to book gains. As soon as the 15 min. gives a signal contrary to the 60 min. then get out of the position.
4) When using 60 min. or 15 min. charts we must only make decisions at the end of the bar. We DO NOT react to the possibility of where we think the bar will end up. Only react to reality at the end of the bar.

All trading:

1)If the portfolio is up 2.5% in the 1st 2 hours cut every trading position in half and look to reposition on the inevitable reversals during the day. The 2.5% number is based on total dollars at risk in the portfolio. Example: $4mil long $4mil short = $8mil risk assets; 2.5% = $200K

2)If the markets turn against our positions and we decide to reduce exposure to better weather the storm we must reduce all positions by the same amount. DO NOT under any circumstances pick and choose which positions to liquidate and which to hold. I guarantee that if you pick and chose you will always pick the wrong names. A portfolio decision to reduce exposure should be made across the board not here or there. Note: This rule does not preclude us from liquidating a position that is giving a negative signal.

3) Position size:
Full position if the price is with in 5% of the ideal price
1/2 position IF the price is between 6%-10% away from the ideal price
NO POSITION IF the price is more than 10% from the ideal price

4) Oil & the equity markets: When oil runs up 2.5% or more quickly in the morning there is no reason to remain long equities. Book the gains you may have and look to reestablish later in the day after the inevitable sell off. Conversely, if oil sells off 2.5% or more in the 1st hour of trading holding shorts is pointless. The market will rally during the day and give us another chance to put the shorts on.