Given the ambiguity of your question, I have to say no. What the heck is a "trade signal"? And 'trading plan' is very ambiguous. It can mean anything from a bare bones trading strategy to that plus everything else up to and including hardware choices and broker choice. Just looking at the bare bones, a trading strategy consists of both an entry strategy and an exit strategy. An entry strategy is a method of generating signals for when to enter trades. An exit strategy is a method of generating signals for when to exit trades. No, almost definitely a "trade signal" is not the only thing needed in a trading plan. Again, define 'trading plan', and be specific. Making the leap that what you mean by "a good trade signal" is a good trade strategy, and assuming that a good trade strategy is one with positive expectation, I'm already on record stating that positive expectation is not enough. It needs to be supplemented with good money management, or position sizing if one prefers. This is elementary stuff but let's review anyway. Consider the following biased betting scenario. There is a 50% chance that you will lose your bet; there is a 50% chance that you will win twice your bet. Clearly you have an advantage (aka an EDGE) in this scenario. Your expectation is E = .5*(-1)+.5*(+2) = 0.5, a positive number. In other words, you can expect to win on average 50¢ for every dollar you bet. Does this mean you should bet the farm? Of course not! A single losing bet would wipe you out. Good money management says your betting account will grow fastest if you bet a constant 25% of your betting account. Any less than that and you're leaving money on the table. Any more than that and you're losing too much. At a position size of 50%, you have completely neutralized your edge (advantage) and you may as well be involved in an ordinary coinflip situation (aka zero expectation). At position sizes of greater than 50%, your account will probably start shrinking. So an edge (positive expectation) can be completely negated by poor money management. The edge is still there, but you pushed it to the point of worthlessness. Just as if you had no edge at all. The difference is that you can recover your profitability by replacing bad money management with good money management IF you also have an edge. But if you have no edge (positive expectation) to begin with, no amount of good money management will make up for that lack. In fact, the best position size for no edge is 0% : don't trade. So why isn't good money management considered to be an edge? Because it should be a given. Calculating the optimal position size is a straightforward matter for any particular series of trade returns. The only real choice is strategy choice. There are a potentially infinite number of different strategies and most of them don't have positive expectation after commissions and slippages. Finding one that does is your edge aka advantage over most other traders.
In strong agreement. +1 Yet, an edge to me and others (like the OP) equates to "anything" that helps a trader to be consistently profitable or helps improves one's trading consistently. Simply, everybody is different, have different routines and have different needs. If it works...keep doing it. It's that simple. P.S. My opinions are that as a discretionary trader.
Just thought I'd bump this so that we can have three threads on edges going all at the same time. Feast and be merry.