A solid trading plan takes care of various market conditions, various market environment, various market behaviour / personality.
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.
Re your exit rule; I don't set a profit target. I look for a change in the price action. Why close a position that is moving in your direction? Let the winners run!!
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.
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).
If your trading plan can answer the following questions you have a solid trading plan. Where do I buy? What do I buy? When do I buy? How much do I buy? When do I sell? The devil is in the details..