What would you say belongs in a solid trading plan?

[volente_00]

KISS
Entry
Exit
Stop that is set upon entry
Objective
Discpline to follow your strategy
Patience to let the trade play out
Belief in yourself
Belief in the positive expectancy of your edge
Balls

 

[easymon1]

oraclewizard77, Moderator, Here's some good rules.

https://elitetrader.com/et/threads/modeling-the-masters-10-rules.340487/#post-5014462

 

[cornerstone]

What would you say belongs in a solid trading plan?

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

idea, to build a direction. Bookmap, to see if the players are going in that direction

 

[easymon1]

...losses in a row
https://elitetrader.com/et/threads/...lowing-your-system.340265/page-3#post-5016346

 

[SimpleMeLike]

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.

Hello bone,

Can you please explain what you mean by position management?

For example, if I enter the market long ES 1350.00 and stop at 1348.00, and profit target at 1354.00 and I am trading one contract. I just enter and sit and wait for my stop or profit target to get hit.

How does position management play a roll in my example?

Thanks,

 

[bone]

Hello bone,

Can you please explain what you mean by position management?

For example, if I enter the market long ES 1350.00 and stop at 1348.00, and profit target at 1354.00 and I am trading one contract. I just enter and sit and wait for my stop or profit target to get hit.

How does position management play a roll in my example?

Thanks,

Position management includes the stop-loss and profit targets as you described above. It should also include a sizing plan. From my years of client work, I have come to the firm conclusion that it's a mistake to assign some fixed amount of capital (you frequently hear one or two percent) to risk on each trade. There's no getting around each person's unique temperament and anxiety levels about risk - I suggest that the trader recognize them, own them, and move on from there. In other words - there's a fair number of people who don't want to risk $1000 on a trade even if they have $50K in their trading accounts. Confidence is very important - if $500 is a more palatable risk number for a person then by all means go with that. I'm also a big proponent of building account equity and not digging a hole for yourself. I work with my clients individually about their own sizing plans, and when to bump up and when to scale it back.

 

[Overnight]

Position management includes the stop-loss and profit targets as you described above. It should also include a sizing plan...

But what if the trader is trading only one contract at a time, and cannot reduce the size of the position?

"After two losses in a row - cut your position sizing in half. When you can manage two winning days in a row - go back to your previous position size..."

 

[bone]

But what if the trader is trading only one contract at a time, and cannot reduce the size of the position?

"After two losses in a row - cut your position sizing in half. When you can manage two winning days in a row - go back to your previous position size..."

One lots are the most difficult - I will readily admit that. You can’t scale down and a bump up doubles your risk. I do some hand holding on occasion.

 

[SimpleMeLike]

Position management includes the stop-loss and profit targets as you described above. It should also include a sizing plan. From my years of client work, I have come to the firm conclusion that it's a mistake to assign some fixed amount of capital (you frequently hear one or two percent) to risk on each trade. There's no getting around each person's unique temperament and anxiety levels about risk - I suggest that the trader recognize them, own them, and move on from there. In other words - there's a fair number of people who don't want to risk $1000 on a trade even if they have $50K in their trading accounts. Confidence is very important - if $500 is a more palatable risk number for a person then by all means go with that. I'm also a big proponent of building account equity and not digging a hole for yourself. I work with my clients individually about their own sizing plans, and when to bump up and when to scale it back.

Hello bone,

Thank you so much for the response.

Regarding sizing plan. I often read or hear, do not risk more than 2% per trade on trading capital. Are you stating , in your opinion, that there is nothing wrong with risking 5 to 10% if it fits the trader temperament.

 

[SimpleMeLike]

One lots are the most difficult - I will readily admit that. You can’t scale down and a bump up doubles your risk. I do some hand holding on occasion.

Bone,

How is one lot the most difficult? Just scale up to 2 lot once account balance double.

For example what is wrong with the bottom approach for scale up.

Balance equal $10000 -----> 1 contract
Balance equal $20000 -----> 2 contract
Balance equal $30000 -----> 3 contract