1. Order entry only through Trend Lines
We require each trader to enter orders only through trend line analysis. The trader has to do the analysis first, look and wait for opportunities. Orders are automatically executed as soon the price touches the drawn trend line study. Trading decisions are faster because traders are limited to trend line analysis only . So traders will only focus on patterns, which they can measure with trend lines. This focus improves the pattern recognition ability of a trader, reduces the decision making time and creates a routined job.
Any single trend line can be pulled out of the database, and so each trade decision of the trader can be explained and verified if needed.
2. Stop loss is a must
For each entry order, the trader must set an exit level. The trader must think about a worst case and a best case scenario before he initiates the trade. Take profit and stop loss levels can be moved later any time within the set risk management levels.
3. Position limits
The exposure of each trade is limited. There are maximum limits for each security and also for each time frame. On a $1mm account the trader can allocate only 25% to one security, and also this allocation has to be spread amount multiple time frames. (example: daily, 240min and 60min charts). The maximum exposure is $100k per time frame. Position limits are part of the trading software. The trader cannot override any position limits due the integrated pre trade compliance rules.
Due to the mandatory and integrated positions limits, the trader is forced to diversify across multiple securities and multiple time frames. That way the trader will be able to catch long term and also short term trends on different markets.