What would you say belongs in a solid trading plan?

A trading plan can include anything that you find useful to meet your trading goals. However there are some must haves to be included in your trading plan, such as:

  • The type of strategy you are going to use.
  • Money management rules
  • The assets you want to trade.
  • Capital available for trading
  • Your risk tolerance
 
mab81 said:
There are various important elements, such as risk management, position management,
how you want to go for trade identification and subsequently trade management, any entry and exit methodologies you deem fit.
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More than being a part of a trading plan, trade identification and entry or exit points are a part of a trading strategy. A trading plan and strategy may look similar but there's a huge difference between them. A planning made upfront before taking any position helps to take calculated measures.
 
cravat said:
A trading plan can include anything that you find useful to meet your trading goals. However there are some must haves to be included in your trading plan, such as:

  • The type of strategy you are going to use.
  • Money management rules
  • The assets you want to trade.
  • Capital available for trading
  • Your risk tolerance
More...
How do you quantify your risk tolerance. Most people don't know what their risk tolerance is much less how to put a number on it.

How do you define how risky something is?
 
The four important things that should be a part of trading plan are:
The currencies you want to trade

Your trading strategy

Entry and exit points

Risk management rules

For any trading plan to give good results, one must have a strict discipline to follow their plan even when things are unexpected.
 
tip of the hat 88.jpg

A tip of the hat to ValeryN for this nugget:

What makes new investors buy and sell at the wrong times?

This has little to do with psychology and is entirely due to having no plan. When plan is backed up by solid stats you don't overthink it, just keep executing without worrying too much if any trade is a win or a loss. Doing wrong things at the wrong time is simply a byproduct of not having sufficient research, plan and/or confidence in them.

ValeryN said:
This has little to do with psychology and is entirely due to having no plan. When plan is backed up by solid stats you don't overthink it, just keep executing without worrying too much if any trade is a win or a loss. Doing wrong things at the wrong time is simply a byproduct of not having sufficient research, plan and/or confidence in them.
More...
 
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