What would you say belongs in a solid trading plan?

[personifica_]

Set the Exit rule in the trading plan!
Most traders make the error of focusing the majority of their attention on seeking buy signals while paying very little focus to when and where to exit.

 

[KCalhoun]

Set the Exit rule in the trading plan!
Most traders make the error of focusing the majority of their attention on seeking buy signals while paying very little focus to when and where to exit.

Very true. I tell my traders, exits are much more important than entries. How to trail stops, when to go to cash is important.

Example: let's say a stock runs from $12 to $18 during two weeks, then drops back down. It doesn't matter where you bought during the run up, as long as you recognized $18 resistance and sold as soon as it reversed back down. You could've bought $12 or $14 etc, entry didn't matter, so long as you sold near $18

 

[SimpleMeLike]

Very true. I tell my traders, exits are much more important than entries. How to trail stops, when to go to cash is important.

Example: let's say a stock runs from $12 to $18 during two weeks, then drops back down. It doesn't matter where you bought during the run up, as long as you recognized $18 resistance and sold as soon as it reversed back down. You could've bought $12 or $14 etc, entry didn't matter, so long as you sold near $18

Good Morning KCalhoun,

Just my opinion, since we are discussing. Mentally I find easier to just pick a profit target and wait for it to be hit. Trailing stops was causing the shoulda coulda woulda over thinking before and after trades.

Full Disclaimer: I am ONLY a consistent profitable trader for 2 months now. Please see my comments as my opinions only. I have zero proof of anything I say longer than 2 months. My comments are probably worth a penny with a hole in it or the dog poop at the dog park.

 

[Jeffery Reid]

True, having a proper exit trading strategy is really important or else it can lead to heavy losses. Traders should prefer using stops or trailing stops while placing your trades.

 

[Merevez]

Imo, having a definite position sizing is also an important aspect in a trading plan. An appropriate position size can help in minimising the losses and maximising the profits if done properly.

 

[Syndactylic]

Imo, the main component of a trading plan is the well calculated risk management and defining the stop.

 

[MichelleHale]

All the components of a trading plan are important. From predefining stops to the appropriate sizing of the position are important. Traders must seek to have a trading plan in which his trading capital is at least risk.

 

[easymon1]

Hot Damn. Tip of the brim to Slope Trader for posting this link...
https://www.newtraderu.com/2015/01/13/30-of-the-worlds-best-trading-rules/

 

[margin_gamble]

What would you say belongs in a solid trading plan?

Say maybe just three or four essentials.
Anything else that could help?

Serendipity in spades ...........

thread started the week of corona virus market greatest/fastest crash of all time.

I'll therefore say just 2 things are needed

(1) Top-notch market timing skills par excellence

(2) Deep pocket = outstanding Capitalization and then some

 

[HeSaidSheSaid]

the magic of the 8% stop loss: then he'd get back break-even point with 8% gain.
1) if one lets loss to drop further down like 10%, then it means he'd need to make 12% in order to break even.
2) if one lets loss to drop down to -17%, then it means he'd need to make 21% to get back to the break even point.
...
just purely statistics