What would you say belongs in a solid trading plan?

[comagnum]

What would you say belongs in a solid trading plan?

The main thing is to have one, few retail trader do. Keep it simple- a few lines will get you started, you can always add on to it.

I have my trading plan opened up & use it every day. It is merged with my risk/trade mgmt, trade log, & journal. The trade plan is my compass - the blue prints.

* Objective - This is your ultimate vision of what you plan intends to accomplish.
* Foundation - This is my short elevator description of what I do.
* Optimal & nominal goals - This gives you a high bar & lower bar to aim for.
* Routines - breaking down the processes of trading & putting it into a schedule.
* Best Practices - I have a list of 80, many I got from one of the old legends.
* Trade/risk mgmt - This is how you define your position sizing & loss tolerances (uncle point).
* Tactics - This is your own approach in selecting trade entries & exits - your edge(s).
* Metrics - Define the metrics you will use and what time frames you will be measuring.

 

[bloomberg1]

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.

" max losing streak length and max PTDD."

Are you talking about high water mark?

 

[deaddog]

A trading plan should be like an operators manual for someone you hire to do your trading while you are out spending your profits.



What to trade, when to buy and when to sell, position size should all be clearly defined or have a formula to calculate those values depending on defined circumstances.



Any decisions that have to be made are clearly defined in an IF /Then scenario.



If this happens then you will do this.



If your employee doesn't follow the plan, they get fired. If you can't follow your own carefully thought out plan you shouldn't be trading.

 

[vincentnyc]

What would you say belongs in a solid trading plan?

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

 

[easymon1]

to

https://elitetrader.com/et/threads/400-trading-algorithms-later.340452/

Summary

Trading demands a lot of practice, patience and discipline. Market is a zero-sum game — in order for you to win, someone else has to lose. As a retail trader, the odds are significantly against you as you’re up against sharks — the hedge funds and sophisticated algorithms armed with a huge amount of capital.

Despite of that, there is still room for you to make a living in this game. Raise your odds by making the conditions as favourable as possible:

- Practice and analyse your strategy before trading it live.
- Avoid inactive hours and symbols without enough liquidity. Trading demands precision, bumpy charts and delayed executions work against you.
- Avoid anxious hours. During significant news events, the market can be hectic. Unless you’re well equipped with a prime broker, a flawless latency and a paid news source (or better yet, have all of the above automated), you have no business during these times.
- Avoid scalping (or trading in general) in low timeframes. It’s very difficult to cut through the noise and the relative size of the spread is huge. This sort of trading has many prerequisites unavailable to a retail traders (direct link to market, small spreads, extremely low latency and large amount of capital).
- Study price action and get a feel for the market.
- Give yourself time to assess each trade. You tend to make mistakes when you’re in a rush. Take it slow, especially while you’re learning.
- Don’t force a trade, even if the conditions are just off. Be patient, stick with your strategy, stay objective, there will always be another trade.
- Manage your risks so that you can survive the inevitable losses. Regardless, trade capital you can afford to lose — it eases a lot of the mental load which enables you to be less emotional.
- Use automated tools to enforce your risk management rules, monitor your positions and make the tedious/repetitive calculations for you. If you can’t automate your trading, at least use the algorithms to make yourself more efficient.

 

[Sekiyo]

A: Hi, how much do you want for it ?
B: I offer each at 3350
A: What about 3300 ?
B: 3325
A: I take three

Later on
B: Just bought it at 3325
A: Lmao it’s not worth this price
B: What do you mean ?
A: Well ... the fed, corona virus and all that sh*t
B: I bought it high to sell higher but I need $ now.
A: I take 3 of them at 3300
B: No wayyy

Later on
B: Hi mumm ! Got an offer you can’t refuse
A: Oh my boy I am sick of your hot potato
B: Yeah ... but this time is different
A: Go F*ck yourself !

The plan is to avoid being the sucker.
And make your mother proud.

 

[GuerrillaTrading]

Knowing your upside and downside exits before entering the trade... and everything everyone else has already said

 

[themickey]

Trade with the tide. If mkt is bullish but your sector is bearish, [think S&P rising, gold falling] then you won't want to be going long gold, basically speaking.
Buy and sell in synch with the big picture.

 

[VincentvanG]

What would you say belongs in a solid trading plan?

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

if you don't know give your money to someone that does or buy Bershire Hathaway shares for example and hold.

Profitable Trading is not for the clueless and cannot be summed up in 3 or 4 essentials

 

[easymon1]

tip of the hat to a BlueWaterSailor post for this one...

"do your own research
do lots of testing at small scale until you're satisfied that it works for you.
understand the larger context in which these trades are supposed to be executed to be successful"