You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
Business Plan for Trading?
- Thread starter JeffUSA
- Start date
think there's a Trader Business Plan component in the free version of TradePerformance
http://www.tradeperformance.com/
http://www.tradeperformance.com/
Thats a good idea, I would have a 20 page plan
Overview - what the business is set to do also known as Executive summary
Finances - upfront/startup costs, ongoing costs, minimum amount of risk capital to be a trader full time given the strategy you employ.
How will you start trading at a level that you will need in order to be a full time trader- savings, loans, partners, etc, working as a subcontractor (prop), etc.
Cashflow- how much money do you estimate the strategies will generate over say 1-3 mth period, annually, etc..
Strategy - Overview of current strategy, skills, returns generated already or in simulation, etc, then consider Growth, Hiring, Outsourcing, Maintaining edges, identifying new opportunities,
In this environment its more critical to have a business plan that describes explicitly your role and path to profitability, avoid technical things like how you trade.
Spend time describing differentiation from other Market players (other traders, market makers, etc) and whether the edge is sustainable over 1,5,10 years.
Their are a few book I'd recommend if you are going the systematic route - These books will make it easier to explain on the business plan the technology side of your trading with risk management, procedures for implementing complex systems, etc:
Inside the Black Box - Rishi Narang
Quality Money Management: Process Engineering and Best Practices for Systematic Trading and Investment
by Benjamin Van Vliet
Ernest Chan - Quantitative Trading
Overview - what the business is set to do also known as Executive summary
Finances - upfront/startup costs, ongoing costs, minimum amount of risk capital to be a trader full time given the strategy you employ.
How will you start trading at a level that you will need in order to be a full time trader- savings, loans, partners, etc, working as a subcontractor (prop), etc.
Cashflow- how much money do you estimate the strategies will generate over say 1-3 mth period, annually, etc..
Strategy - Overview of current strategy, skills, returns generated already or in simulation, etc, then consider Growth, Hiring, Outsourcing, Maintaining edges, identifying new opportunities,
In this environment its more critical to have a business plan that describes explicitly your role and path to profitability, avoid technical things like how you trade.
Spend time describing differentiation from other Market players (other traders, market makers, etc) and whether the edge is sustainable over 1,5,10 years.
Their are a few book I'd recommend if you are going the systematic route - These books will make it easier to explain on the business plan the technology side of your trading with risk management, procedures for implementing complex systems, etc:
Inside the Black Box - Rishi Narang
Quality Money Management: Process Engineering and Best Practices for Systematic Trading and Investment
by Benjamin Van Vliet
Ernest Chan - Quantitative Trading
Hi Guys, I'm always confused which one comes first. Trading Plan or backtesting? If we write a trade plan based on a strategy that is not proven profitable yet, do we still write that plan? If we wrote the plan before back test, when do we start to alter the plan if we feel a particular plan is not up to expectation?
here are the key trading elements of your business plan:
http://www.elitetrader.com/vb/showthread.php?s=&postid=2745019#post2745019
You also need to make sure you have enough capital to get started, stay in business for at least one year, and have an emergency fund.
BUT, main elements were spelled out by lescor.
http://www.elitetrader.com/vb/showthread.php?s=&postid=2745019#post2745019
You also need to make sure you have enough capital to get started, stay in business for at least one year, and have an emergency fund.
BUT, main elements were spelled out by lescor.
Quote from wuming79:
Hi Guys, I'm always confused which one comes first. Trading Plan or backtesting? If we write a trade plan based on a strategy that is not proven profitable yet, do we still write that plan? If we wrote the plan before back test, when do we start to alter the plan if we feel a particular plan is not up to expectation?
Back testing should be part of your plan. You know the part about how you know your strategy will work.