What would you say belongs in a solid trading plan?

Discussion in 'Trading' started by easymon1, Feb 10, 2020.

  1. bone

    bone ET Sponsor

    No, my feeling is counter to your post. Risking 5 to 10 percent on a trade is asinine with one exception: you are really, really wealthy and most of your assets are not included in your trading account.

    Let me clarify what I meant: that a certain number of inexperienced traders feel quite uncomfortable risking 2 percent on a single trade - and my strong feeling is for that trader to own that emotion and risk less. It is very debilitating to an inexperienced trader (and many experienced traders, too) to dig a deep hole for themselves. I am a firm believer in grinding out income and building up account equity - big bets are usually a disaster for most mere mortals.
    #31     Feb 19, 2020
    Sekiyo and SimpleMeLike like this.
  2. bone

    bone ET Sponsor

    If you are trading flat price outrights - trading one lot futures with less than $25K is sheer stupidity from my experience, with micro contracts being an exception. I had an ET Member PM me that he had lost $80K in six months trading outright one lots in CL. It's not hard to do.

    You can trade literally tens of thousands of futures spread combinations with very modest account equity - it's the cheapest way to trade futures that I know of. For example, a 1-2-1 Eurodollar Butterfly costs about $175 initial margin.
    #32     Feb 19, 2020
    SimpleMeLike likes this.
  3. Bone,

    Excuse my ignorance, but I am not sure I understand what price outfights mean. I just trade CL futures, 1 contract. I would think $25K is enough.
    #33     Feb 19, 2020
  4. bone

    bone ET Sponsor

    An outright is a straight up unhedged postion - like buying a CL futures contract.

    In terms of capitalization - depends entirely upon your trading system.
    #34     Feb 19, 2020
  5. %%
    another way to do it. Rich Dennis said ''get your head out of the mixer, when losing '' And he traded more than one lots........................................................
    #35     Feb 19, 2020
  6. easymon1


    A tip of the hat to Robert Morse for his post from which this was lifted,

    'What is your process?
    What triggers a buy or a sell to open?
    What triggers an exit?
    How do you size your trades?
    When you made money, why would you say that worked when you did the same thing on another trade and it failed?'

    #36     Mar 9, 2020
  7. easymon1


    A list of questions you may want to ask before placing a trade.
    for example
    # 7 – Is My Position Size Calculated Properly?
    If you were trading the YM and you saw a trade opportunity that entailed a 15-point stop loss, how many contracts would you trade if you could take a market risk of $500 per trade (or 2% of $25k)? The answer is 6 contracts.

    Risk/stop loss = $ per tick value.
    $500/15 = $33 per tick.
    Each YM contract moves $5 per tick. So, to get close to $33 per tick, you need 6 contracts, as 6 x $5 per tick = $30 per tick.

    #37     Mar 31, 2020
  8. easymon1


    a tip of the hat to sstheo for his post from which this was lifted,

    1) Don't rush
    2) Keep it small at the beginning
    3) Grow gradually
    4) Adapt with the market volatility
    5) Keep it simple
    6) Micros are a great way to control risk
    7) Honor your stops
    8) Set a daily goal and stop when you reach it
    9) Have a big goal to motivate you
    10) Keep a journal and maybe even post it to keep yourself publicly accountable

    #38     May 7, 2020
    murray t turtle likes this.
  9. %%
    AND any leverage is the WORST way to learn...………………………………………………………………...
    #39     May 8, 2020
  10. easymon1


    To GraceWilson goes a Tip of the Hat for her post from which this was lifted

    Here are some tips to follow if you are new to trading-

    • Develop a trading strategy and always adhere to it.
    • Set a stop - loss for every trade. Otherwise, failure is almost certain.
    • Don't risk more than 2% of your margin per single trade.
    • Keep your emotions separate from trading.
    • Never trade to compensate for your losses.
    • Only trade when you feel it's the right moment.
    • Don't be afraid of losses, every trader has them.
    • Try to achieve more profitable trades, and have less unsuccessful trades.
    #40     May 14, 2020