Futures Trading Rules

CRITICAL LESSON: The Five Outcomes to a Trade

"Eliminate A Big Loss & Start Making Money"

The first 4, came from one of my mentors.  The fifth outcome was added by me after studying Marty Scwhartz.

The SwingArm Indicator: A Comprehensive Analysis Tool

The SwingArm Indicator is a sophisticated trading tool that incorporates Fibonacci Retracements, Extensions, and Average True Range of Price (ATR) to offer a comprehensive analysis of the financial markets.

This color-coded indicator helps traders make objective decisions by providing visual representation of the market’s price action, support and resistance levels, and potential trend reversals.

By utilizing the Fibonacci ratio, Fibonacci retracements identify key support and resistance levels in the market. The combination of retracements and extensions helps traders determine potential reversal points in the market. The ATR, on the other hand, calculates the average true range of price movement, taking into account the previous bar’s high and low.

The integration of these three powerful indicators provides traders with a valuable tool to enhance their understanding of the financial markets, price action, and potential trades.

When it comes to trading, it’s all about personal preference. Some traders prefer the fast-paced style of day trading, which helps mitigate the risk associated with news, events, and price movements. However, day trading may also develop into a swing trade, but it’s not always the objective.

On the other hand, swing trading requires patience as traders wait for a favorable setup to materialize. They need to assess support or resistance levels and be prepared to enter or exit a trade if the price action confirms their expectation. Unlike day traders, swing traders may have to wait for the right moment to enter a trade, but the reward can be substantial if the trade pans out.

Patience is a crucial aspect of Swing Trading. The wait for an appropriate setup could span days or even weeks, which is why some swing traders diversify by trading multiple symbols, usually ranging from 10 to 20.

This strategy helps ensure that there is always at least one potential trading opportunity available every week. The precise trading regulations and directions you follow will be based on factors such as your personal trading plan, location, tolerance for risk, size of the account, and trading approach.

Each Symbol (ie: /ES, /CL, etc) Has their own rhythm. You Must Learn to Trade to their music!

How Can A Trader Learn any Symbol’s Rhythm? by hours and hours of studying charts. This is only obtained with effort and experience.

Which Sessions to Trade? Asia? Europe or USA? or all...?

Trading the US session has been a breeze for me due to my location in Miami, FL. However, studying the European session was quite a challenge as it required me to wake up as early as 2:50 AM every day. Despite the difficulties, the experience proved to be worthwhile as trading both sessions has opened up substantial profit opportunities. For example, my trading plan for Oil (/CL) aims for price movements ranging from $0.30 to $1 or $2, with a stop loss of $150 per contract. This strategy was inspired by Marty Schwartz and if I were to relocate to Spain, it would provide an optimal environment for me to continue my trading endeavors.

Aiming to hear the sound of your cash register daily, your strategy should involve taking advantage of smaller movements with multiple contracts, utilizing tight stop-losses, and executing an aggressive management approach.


It can be tempting to believe that the lessons taught by successful traders are easily applied, but the market is constantly reminding us of its power and the importance of humility. Without this respect, our accounts can be taken over by the market and our emotions can cause significant losses. Unfortunately, many traders have lost significant sums of money while trying to master these lessons, making it challenging to consistently abide by the rules in the long term.


To find a reliable support or resistance level, look for a spot where the price has hit and bounced back at least twice. Drawing channels and utilizing the channel boundaries as reference points is an effective method.

Manage Profits

Once a trader figures out a system that allows the protection of capital, eliminating a “Big Loss”, then the focus becomes how and when to manage profits.

When a trader has found a system that effectively protects their capital and prevents significant losses, their attention turns to maximizing profits. A trader’s effectiveness is determined by their ability to choose the right entry point, safeguard their capital without being forced to exit the trade prematurely, and to know when to exit the trade at the most profitable point. In the case of an early exit, the trader can always re-enter the trade if the price retraces to a support or resistance level.

ThinkOrSwim SwingArms

Establish a dollar amount for your risk tolerance for each trade. For instance, $100 per contract. My stops vary from $150 to $500 per contract, depending on the price movement. Skilled traders with larger accounts may opt for larger stops and gradually adjust them to reach break even.

The key to effective trade entry and stop adjustment is having knowledge and experience. Take your time to find the best approach that suits your trading style.

From the beginning, set your stop and profit targets. Then, only adjust your stop to protect your profits.

Manage Profits

Use Pre Set Orders With Built In Profit Targets and Stop Loss Protection – THINKORSWIM Illustration.

Sell Order ThinkOrSwim TD Ameritrade

My primary objective in a trade is to reach break even or better. As the trade progresses in the desired direction, I adjust the stop to secure more profits. I repeat this process as long as the price movement aligns with my expectations. However, if the price trend does not continue as predicted, I either adjust the stop or exit the trade.

In case my analysis leads to an incorrect trade entry, I either adjust the stop or close the trade.

The accompanying illustration showcases one of many ways to trade and manage stops. If you need more information, please don’t hesitate to reach out to us.

Buy Order ThinkOrSwim TDAmeritrade

Adjust your Take Profit Target if Momentum Stops or Speeds up. Manage Profits.
Adjust Stop To Protect More and More Profits.


Position Size

For novice traders, it’s crucial to start by practicing on paper, taking the time to fully comprehend the strategy, process, and software. Before making any live trades, it’s recommended to start with the smallest contract size available to limit risk and exposure. Carelessness and recklessness can result in substantial losses, so it’s advisable to keep the quantity low as well.

Initially, new traders should only trade a maximum of 1 contract. After several weeks of consistent profitability, they may consider increasing to 2 contracts if their account size can handle it. The recommended stop loss at entry is $500 per contract, which should be quickly adjusted to reach break-even plus, or even more, at $300 or $200 per contract.

Experienced traders using blackFLAG FTS, may trade up to 4 contracts per symbol per day, focusing on capturing the best setup of the day. The goal is to maximize profits and then trade smaller, if necessary. To see an example of a bad day in trading, click here!

Account Size

It is recommended to have a minimum account size of $100,000 or higher for optimal trading results. For individuals with smaller accounts, it is crucial to engage in paper trading until a proven track record is established. Only after thoroughly understanding the process, should real funds be invested. Start slowly with the smallest contract option, “/MES”, to control risk and exposure. Take the necessary time to ensure success.

Maximum Acceptable Loss / Day

It’s advisable to set a daily loss limit that you are comfortable with. If this limit is reached, it’s best to halt trading for the day. If external factors such as news, politics, or volume interfere with your market analysis, it’s wise to stop trading and wait for the next day. There’s no need to take unnecessary risks without proper trade performance.


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$ Millions Of Dollars Have Been Lost Before.
Do Not Become Part of The Statistics and Do Your Homework!