Do You Have A Trading Plan, and Do You Know It Inside and Out?
- Thread starter RAMOUTAR
- Start date
My trading approach is simple. Price action, this will never fade away. It is the market itself.
Doesn't sound like I have an edge does it? My edge is risk management, strict adherence to stops with 100% of my trading focus on high reward/low risk trading scenarios with a minimum 2-1 win/loss ratio.
I know I have thrown out these numbers here before but this is so very critical in the beginning. I am feeling sleepy and do not have a calculator handy but even with a horrible winning trade %of around 33-34%, by accepting nothing more nothing less than a 2-1 win/loss ratio a trader can at the very least have a flat trading account at the end of the year ....that is much better than most!
Doesn't sound like I have an edge does it? My edge is risk management, strict adherence to stops with 100% of my trading focus on high reward/low risk trading scenarios with a minimum 2-1 win/loss ratio.
I know I have thrown out these numbers here before but this is so very critical in the beginning. I am feeling sleepy and do not have a calculator handy but even with a horrible winning trade %of around 33-34%, by accepting nothing more nothing less than a 2-1 win/loss ratio a trader can at the very least have a flat trading account at the end of the year ....that is much better than most!
100% mechanical has been very emotionally liberating for me in the month I've been trading that way. I recommend this route to anyone stumbling through their emotions. As I believe Axe mentioned in another thread, even if it simply leads to a more precise understanding of the concepts you trade discretionarily... confidence comes from having a concrete plan with consistent and testable historical expectancy. it has made all the difference in my trading. i dont even blink at my trades now, winner or loser, they are all part of a very objective reality.
Seems kinda surprising that only 16 people have voted on this poll (to this point). Perhaps this explains why we see so much "trader frustration" here on ET. Maybe many people are trading without clarity due to the lack of a trading plan.
RAMOUTAR.....Good poll idea.
funky..............Good post (top of page 2).
BSAM
RAMOUTAR.....Good poll idea.
funky..............Good post (top of page 2).
BSAM
I had a trading plan that I used to make 1200 % on my
small trading acocunt in 2000
but the opp. for arb I found then has mostly disappeared
it has truely been a struggle for me to find some
other method that works for me
and that keeps me disicplined.
the 1200 % return was made with a approx 95 % weekly
win rate and my only bad weeks that yr were do to errors
and broken trades
small trading acocunt in 2000
but the opp. for arb I found then has mostly disappeared
it has truely been a struggle for me to find some
other method that works for me
and that keeps me disicplined.
the 1200 % return was made with a approx 95 % weekly
win rate and my only bad weeks that yr were do to errors
and broken trades
I have a very simple trading plan:
1st rule-Have a great and compelling reason to buy. I need a clear edge. Not a "maybe" or a brokers tip or something I heard from CNBC. I only trade what I know. And I know market pyschology pretty well.
2nd rule-Never hope or pray for the market to move in your favor. That's a quick way to go broke. Have a plan.
3rd rule-Always keep learning. One great lesson that I've gotten from Tony Robbins is constant and never ending improvement. The difference between good and outstanding isn't very big. The only thing seperating a .250 hitter from a .333 hitter is one extra hit every 12 at bats. If you do one better, you elevate yourself into legendary status with a .400 average. I write down all my trades, my thought process, and what I learned. This is invaluable.
Case in point, in the Sunday LA Times, there was an Op Ed piece on why the housing market was not in a bubble. It really was "different this time". The old market cycles didn't apply to housing. Of course I thought this was foolishness. This was like writing about Japanese real estate in 1988 or '89. I simply added to my LEAP put options in certain housing related stocks. I have my reasons why, I have a plan, I know what happens when you start seeing articles saying "it's different this time", "The old rules don't apply etc".
1st rule-Have a great and compelling reason to buy. I need a clear edge. Not a "maybe" or a brokers tip or something I heard from CNBC. I only trade what I know. And I know market pyschology pretty well.
2nd rule-Never hope or pray for the market to move in your favor. That's a quick way to go broke. Have a plan.
3rd rule-Always keep learning. One great lesson that I've gotten from Tony Robbins is constant and never ending improvement. The difference between good and outstanding isn't very big. The only thing seperating a .250 hitter from a .333 hitter is one extra hit every 12 at bats. If you do one better, you elevate yourself into legendary status with a .400 average. I write down all my trades, my thought process, and what I learned. This is invaluable.
Case in point, in the Sunday LA Times, there was an Op Ed piece on why the housing market was not in a bubble. It really was "different this time". The old market cycles didn't apply to housing. Of course I thought this was foolishness. This was like writing about Japanese real estate in 1988 or '89. I simply added to my LEAP put options in certain housing related stocks. I have my reasons why, I have a plan, I know what happens when you start seeing articles saying "it's different this time", "The old rules don't apply etc".
Yes, and most of the time I stick to it (my self discipline is not yet perfect, may never be perfect).
However, it must be a pretty decent plan.
One way to find out if it's any good or not is to papertrade against it.
When I papertrade against it to check it (realtime), it almost always kicks the sh*t out of me. When/If this ceases to happen, I'll look for a new plan.
However, it must be a pretty decent plan.
One way to find out if it's any good or not is to papertrade against it.
When I papertrade against it to check it (realtime), it almost always kicks the sh*t out of me. When/If this ceases to happen, I'll look for a new plan.