What would you say belongs in a solid trading plan?
- Thread starter easymon1
- Start date
Position Management by far. No question. I've heard it said that perfect trade entries don't require much in terms of position management but nobody has "perfect" entries (unless you're doing something illegal).
I typically see traders put 99 percent of their energy into trade entry. Which is a huge mistake, because shitty position management is what blows out traders.
I typically see traders put 99 percent of their energy into trade entry. Which is a huge mistake, because shitty position management is what blows out traders.
1. Baseline expectations for winrate, payoff ratio, max losing streak length and max PTDD.
2. Position sizing rules (max risk) which are derived from the above.
3. Rules and process for trade identification and entry
4. Trade management and exit methodology
5. A list of "mistakes to avoid" - very important but often overlooked, the market should never be fooling you twice. This is the main "living" part of my trade plan which is adjusted to respond to new market challenges.
2. Position sizing rules (max risk) which are derived from the above.
3. Rules and process for trade identification and entry
4. Trade management and exit methodology
5. A list of "mistakes to avoid" - very important but often overlooked, the market should never be fooling you twice. This is the main "living" part of my trade plan which is adjusted to respond to new market challenges.
You need profitability and risk management.
Entry, TP, SL & Position sizing.
It’s like a business plan.
If you can’t tell what’s your business about,
Then you got none.
You should be able to teach it.
It should be reproduce-able, replicable.
At least by your future self. It’s a program.
Entry, TP, SL & Position sizing.
It’s like a business plan.
If you can’t tell what’s your business about,
Then you got none.
You should be able to teach it.
It should be reproduce-able, replicable.
At least by your future self. It’s a program.
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You ain't gonna like this... Trading well is DIFFICULT!
To succeed...
1. Learn Technical Analysis
2. Be disciplined.
Those 2 thingys eliminate 95% of wannabes.
KISS, as always.
To succeed...
1. Learn Technical Analysis
2. Be disciplined.
Those 2 thingys eliminate 95% of wannabes.
KISS, as always.
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%%
[5]That;
+ don't buy junk like mania TSLA, even though some managers permit 10% gold or 10% junk silver.LOL/true.I though about buying TSLA, if the fundamentals + technical were not like tulip time, I may buy a fund/ETF with TSLA in it, 'caus I cant kick TSLA out of that fund today.
[5.5]NEVER average down on junk like DAL, AMR, TSLA, BSC, LEH, GM. they have gone or maybe will go bankrupt; could average down on SPY, QQQ, with wisdom. Paul Tudor Jones says ''losers average losers''
[1] TRY to avoid a max DD of 80% in QQQ, it has done that in past bears; so have a selling plan.Or if you are young guy, could buy SPY or QQQ every quarter...... or every year..........................................................................................................
1) What to trade (Stock indices? Gold? Apple?), and how to trade it (futures? CFD? Cash? Options?). Costs and account size are important here.
2) When to open positions
3) What size should positions be
4) When to close positions (... how long to expect to hold them for)
Of these (2) is the least important, and the one that gets all the attention.
An example:
Trade a single instrument. Choose the cheapest instrument and product you can, given the capital you have available. SPY, for example, needs about $7K in capital.
Opening rule:
Moving average crossover: 16 day moving average minus 64 day moving average.
• If 16 day moving average > 64 day moving average: go long
• If 16 day moving average < 64 day moving average: go short
Do not open a new trade in the same direction as a recently closed trade. Wait until the opening rule has changed direction.
Position sizing:
Notional exposure =(target risk % × capital) ÷ instrument risk %
Where target risk = 12% and instrument risk is measured as annual standard deviation of returns.
Closing rule:
Trailing stop loss, with a stop loss gap set at 0.5 multiplied by the risk of the instrument, measured in annual standard deviation of returns (price units)
GAT
@globalarbtrader -- you should have an Award for: Clarity and Answering with meaningful content. Bravo (Wishing others would take your lead with Posting Style) Thanks.
"Say maybe just three or four essentials".
More like hundreds. Everyone thinks this going to be so easy, buy the dip, but it is not that easy.
Takes years to figure out if you going to be a Soros or someone who is going to grind it out and take in direction of big money. For me, was better to be a grinder, make something, anything each day, week, month, year, early years it is inverse.
The complete guide to the futures markets. Fundamental analysis, technical analysis, trading, spreads, and options, by Jack Swagger, I got it in 1985
There are no right or wrong moving averages. Many on here don't trade and yet I have gotten very good ideas from them. Secret to my way of trading is studying extremes on charting, finding patterns that most over look, so you end up not taking last signals as market is changing trend, then identifying other chart patterns that show continuation of current trend, support and resistance, clusters of highs/lows will either produce entry or stop me from buying into resitance. Risk management should take the longest time of management of the whether to take signal at all based on past time of charts, existing trade, knowing all the answers in case any problem happens, this will take years/decades as some problems don't happen all the time, learn to take losses and not ruin your day, if you not having any losses in a day means you not trading enough.
Swagger's book offers great ideas, but you have to think outside the box for entries, go wild and think of off the wall and always sim, back test great deal, it is your hard earned money at risk.
After 42 years of trading, it has gotten so boring, and yet have so much knowledge and it takes so many years to acquire. When people say it can't be done, either they doing it and don't want you to figure it out or they can't do something. People don't like others to suceed.
Good luck to you.
More like hundreds. Everyone thinks this going to be so easy, buy the dip, but it is not that easy.
Takes years to figure out if you going to be a Soros or someone who is going to grind it out and take in direction of big money. For me, was better to be a grinder, make something, anything each day, week, month, year, early years it is inverse.
The complete guide to the futures markets. Fundamental analysis, technical analysis, trading, spreads, and options, by Jack Swagger, I got it in 1985
There are no right or wrong moving averages. Many on here don't trade and yet I have gotten very good ideas from them. Secret to my way of trading is studying extremes on charting, finding patterns that most over look, so you end up not taking last signals as market is changing trend, then identifying other chart patterns that show continuation of current trend, support and resistance, clusters of highs/lows will either produce entry or stop me from buying into resitance. Risk management should take the longest time of management of the whether to take signal at all based on past time of charts, existing trade, knowing all the answers in case any problem happens, this will take years/decades as some problems don't happen all the time, learn to take losses and not ruin your day, if you not having any losses in a day means you not trading enough.
Swagger's book offers great ideas, but you have to think outside the box for entries, go wild and think of off the wall and always sim, back test great deal, it is your hard earned money at risk.
After 42 years of trading, it has gotten so boring, and yet have so much knowledge and it takes so many years to acquire. When people say it can't be done, either they doing it and don't want you to figure it out or they can't do something. People don't like others to suceed.
Good luck to you.