What would you say belongs in a solid trading plan?
- Thread starter easymon1
- Start date
From the thread "Common Traits of a Good Trader"
a Tip of the Hat to Scataphagos
"2 biggies...
#1... Know his methodology is correct. That is, having figured out what he's supposed to do and why.
#2.... Discipline, in all aspects. Paying "close attention", trades to take, plays not to make, stops.
You see... if your methodology is correct* and you apply it with discipline, it's almost impossible to lose!
That's it. KISS, baby!
* And what methodology is that? Price TA is the only one I know that works for sure. (Yeah, there is insider trading and front-running, but those are illegal... unless you're a big muckety-muck in the government, of course.)"
https://www.elitetrader.com/et/threads/common-traits-of-a-good-trader.360149/page-2#post-5420048
a Tip of the Hat to Scataphagos
"2 biggies...
#1... Know his methodology is correct. That is, having figured out what he's supposed to do and why.
#2.... Discipline, in all aspects. Paying "close attention", trades to take, plays not to make, stops.
You see... if your methodology is correct* and you apply it with discipline, it's almost impossible to lose!
That's it. KISS, baby!
* And what methodology is that? Price TA is the only one I know that works for sure. (Yeah, there is insider trading and front-running, but those are illegal... unless you're a big muckety-muck in the government, of course.)"
https://www.elitetrader.com/et/threads/common-traits-of-a-good-trader.360149/page-2#post-5420048
The first thing you've got to state is your expectations from the deal. That is one of the most important thing before you start doing anything including trading. Just the same as business plan: you need to realise what you aspire to and what you want to achieve. This can be called exit position. Is should be clearly stated, vague limits usually lead to the loss of the trade as the trader has no idea when to close the deal.
The second thing is that you have to justify somehow your plan. You need to calculate the probability of success and your risks. It is an open secret that there are still chances of losing the money in every deal, so this should be stated clearly in order to move towards the third point.
Thirdly, after you estimated the risk, you shoud secure it. Many traders use stop losses in order not to lose much money in a single trade.That is a really effective tool to hedge your risks.
After it, you need to set your risk ratio, so that your overall trading will be benefitial in the long run.
The second thing is that you have to justify somehow your plan. You need to calculate the probability of success and your risks. It is an open secret that there are still chances of losing the money in every deal, so this should be stated clearly in order to move towards the third point.
Thirdly, after you estimated the risk, you shoud secure it. Many traders use stop losses in order not to lose much money in a single trade.That is a really effective tool to hedge your risks.
After it, you need to set your risk ratio, so that your overall trading will be benefitial in the long run.
1) trading edge (from back testing)
2) risk management
3) discipline
4) market sentiment/news
2) risk management
3) discipline
4) market sentiment/news
I would say, 3 Management skills - Risk, Money and Positions
Got a Solid trading plan but not following it very well?
Start an Error Log pencil and paper, nothing fancy.
Do something dumb? jot down a brief name for that dumb move.
If you do it again, write it down again. Don't get torqued about it. Yet.
Rinse. Repeat.
After a week you'll have a list of dumb moves.
Review and get serious about tackling the baddest of the bad.
One by one you'll get a handle on wtf's going down besides your account.
https://www.elitetrader.com/et/thre...solid-trading-plan.340340/page-4#post-5031706
Start an Error Log pencil and paper, nothing fancy.
Do something dumb? jot down a brief name for that dumb move.
If you do it again, write it down again. Don't get torqued about it. Yet.
Rinse. Repeat.
After a week you'll have a list of dumb moves.
Review and get serious about tackling the baddest of the bad.
One by one you'll get a handle on wtf's going down besides your account.
https://www.elitetrader.com/et/thre...solid-trading-plan.340340/page-4#post-5031706
Perfect entries don't exist; perfect Position Management does not exist either.
Both strategies have advantages and disadvantages. So use them both.
Nobody can deny that trying to have perfect entries is a bad idea.
I always put a hard stop on every position. I have different sizes I trade for RTH and ETH because of the difference in volume. That's all. I always use the respective size for the two timeframes (RTH and ETH), as you can never know which trade will be more risky or more profitable.
Shitty entries can blow out traders too.
%%
Mostly true+ cheap edUcation\cheap location is seldom worth it.
And too much \leverage\capital@ first tends to be counter productive. Investments may help/they tend to be more profitable\certain exception$ may apply/LOL.
NOT a prediction, not insured by any federal agency..........................................