ChatGPT: One Page Manifesto on Day Trading & Trading Plan

schizo

schizo

This is a one page manifesto on day trading.

Day Trading Manifesto: The Simple Art of Creating Wealth

I believe that day trading is a rewarding career that offers me freedom, flexibility, and financial independence. I am committed to improving my skills and achieving my potential as a day trader. I am proud to be a part of the day trading community that strives for excellence and innovation. As a day trader, I pledge to:
  • Educate myself on the fundamentals of trading, the markets, and the instruments I trade.
  • Develop and test a trading plan that suits my personality, goals, and risk tolerance.
  • Follow my trading plan with discipline and consistency, and adapt it as I learn from my experience.
  • Manage my risk by setting stop-losses, position sizes, and diversifying my portfolio.
  • Keep track of my performance and review my trades regularly.
  • Stay informed of the news and events that affect the markets and my trades.
  • Maintain a positive mindset and a healthy lifestyle.

Recommended Trading Plan for John Doe
  • Trading Style: Swing trading (??)
  • Trading Objective: To generate consistent income from trading stocks
  • Risk Tolerance: Moderate
  • Trading Capital: $50,000
  • Maximum Risk per Trade: 2% of capital ($1,000)
  • Maximum Risk per Day: 6% of capital ($3,000)
  • Profit Target per Trade: 4% of capital ($2,000)
  • Profit Target per Month: 20% of capital ($10,000)
  • Trading System: Trend following using moving averages and MACD
  • Entry Rules: Buy when price crosses above the 50-day moving average and MACD is positive; sell when price crosses below the 50-day moving average and MACD is negative
  • Exit Rules: Use a trailing stop-loss of 2% or a fixed profit target of 4%; exit if the trade is open for more than 10 days
  • Position Sizing: Use the Kelly criterion to determine the optimal position size based on the win rate and reward-to-risk ratio of the system
  • Trading Hours: Trade only during regular market hours (9:30 am to 4:00 pm EST)
  • Trading Days: Trade only on weekdays (Monday to Friday)
  • Trading Instruments: Trade only liquid stocks with an average daily volume of at least 1 million shares
  • Trading Journal: Record every trade with the date, time, entry price, exit price, position size, profit or loss, and any notes or observations
  • Performance Review: Review the trading journal and performance metrics at the end of each month; identify strengths and weaknesses; make adjustments if needed
 
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20% a month compounds to 800% a year.
And very scalable if it is swing trading(??), with hold periods of up to 10 days.

Did ChatGPT write all of that? Because it sounds like it does not know about the difference between day trading and swing trading.
 
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Businessman said:
20% a month compounds to 800% a year.
And very scalable if it is swing trading(??), with hold periods of up to 10 days.

Did ChatGPT write all of that? Because it sounds like it does not know about the difference between day trading and swing trading.
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Sorry, I probably did screw up with the way I phrased my question(s). I'm currently fudging with "prompt engineering".

Nevertheless, the response it gave was so sound that I decided to share. Hope it might get all the noob traders back on track.
 
Next step is to come up with a plan that spells out specifics. You need an action plan.
How are you going to "Educate myself on the fundamentals of trading, the markets, and the instruments I trade."? How will you know when you are done?

What does moderate risk tolerance mean? How do you quantify moderate?

And so on. You need specifics you can measure and a time line to complete each action.
 
deaddog said:
Next step is to come up with a plan that spells out specifics. You need an action plan.
How are you going to "Educate myself on the fundamentals of trading, the markets, and the instruments I trade."? How will you know when you are done?

What does moderate risk tolerance mean? How do you quantify moderate?

And so on. You need specifics you can measure and a time line to complete each action.
More...
Most traders don't even have a manifesto of their own. LOL

You can still use the above "recommended trading plan" as a template, which looks pretty good IMO.
 
schizo said:
Most traders don't even have a manifesto of their own. LOL

You can still use the above "recommended trading plan" as a template, which looks pretty good IMO.
More...
I doubt that the majority of posters on ET have a written plan that specifically tells them what to do next, how to react to what the market does.
 
I just asked it for a specific day trading strategy, this is what it came back with:

Trading Setup:
  • Timeframe: 5-minute chart
  • Indicators: 9-period simple moving average (SMA) and 21-period simple moving average (SMA)
Entry Signal:
  1. Wait for the 9-period SMA to cross above the 21-period SMA, indicating a bullish crossover.
  2. Look for a pullback or retracement after the bullish crossover, where the price briefly dips or consolidates.
  3. Enter a long trade (buy) when the price breaks above the high of the pullback candle, indicating a resumption of the bullish momentum.
  4. Place a stop-loss order below the low of the pullback candle to manage risk.
  5. Set a profit target based on your predetermined risk-reward ratio, such as 2:1 or 3:1, or use trailing stops to lock in profits as the trade moves in your favor.
Example:
  • Let's say the 9-period SMA crosses above the 21-period SMA on the 5-minute chart of S&P 500 E-mini futures.
  • After the bullish crossover, the price retraces and forms a pullback candle.
  • Once the price breaks above the high of the pullback candle, you enter a long trade with a stop-loss order placed below the low of the pullback candle.
  • You set a profit target of 2 times your risk or use a trailing stop to lock in profits as the trade progresses.
 
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