What would you say belongs in a solid trading plan?

A solid trading plan takes care of

various market conditions,
various market environment,
various market behaviour / personality.
 
bone said:
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.
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Absolutely -- it's all about position management. In my lessons learned thread a lot of traders disagreed with my assertion that EXITS are much more important than entries.

It's how you set stops, re-entries and where you exit your trades that matters. Obsessing over specific entries is not nearly as important.

Scanning to find charts worth trading is essential, eg wide range clean patterns.
 
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trading plan investopedia.jpg
 
deaddog said:
Re your exit rule;
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i appreciate the compliment, but those three items are from an article in investopedia. i like that ol' Matt put Exits before Entries. Kinda one of those Begin with the End in mind peices of advice.

But yeah, nothing wrong with runners.
 
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The 2% Position Risk Rule: Facts and Fiction
https://www.priceactionlab.com/Blog/2019/06/position-risk-rule/

Conclusion
The 2% rule, or any x% rule of this sort, applies to frequent trading at low cost
where the effect of a reduction in expectation due to position sizing is
counterbalanced by an increase in frequency of trades.

The 2% (or X%) rule can be used with

  • Medium frequency trading (scalping, intraday, short-term)
  • Strategies with well-defined stop-loss levels
  • Multiple open positions in different markets (portfolio heat control)
The 2% (or X%) rule cannot be used with

  • Most mean-reversion strategies
  • Medium to longer-term trend-following
  • Strategies that do not use stop-loss
Alternative schemes for controlling risk when the rule does not apply must be used as mentioned above including but not limited to varying the strategy
allocation accordingly.
 
.... assuming you have good trading ideas, I'd say:

1. Trade management (when the trade goes in you favour).
2. Risk management (when the trade does not go the way you envisioned).
3. Discipline to follow your set-ups (i.e. don't chase, don't trade via emotions).
 
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