What would you say belongs in a solid trading plan?

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

  1. %%
    + a private library and or a library card............................................................
    Exits are important, even though if they are paying you dividends/have to figure that in.[SQQQ or TQQQ/qld, dividends are not so note worthy /as dividends in cash ETFs...........................................
    #51     Mar 15, 2021
  2. Yes, apparently the devil is in the details. To know when to enter and exit the market is also a craft.
    #52     Mar 21, 2021
  3. Having a solid trading plan can take some time. Like when I started, my goals were a bit different and once I kept learning, more things started adding to the plan. More of a personal thing I believe.
    #53     Mar 22, 2021
  4. I kind of agree with what you’re saying. Before I actually began trading with huge amounts, I used to risk about 4% of my entire capital. But as I learned more things about the market and I started paying more attention to my risk reward. Anyhow, I’m looking to trade with different platforms and so far I have Fxpro, Fxview and Oanda on the list. Knowing where to trade should also be included in the trading plan too right?
    #54     Mar 22, 2021
  5. %%
    Seldom close a profitable position/long term trend;
    medium term /it can pay, because it may bounce around 50dma. So both......................................................................
    #55     Mar 22, 2021
  6. 4% is a lot to risk and it’s good that you overcame that. As I said, the trading plan is something your own so you can include anything in it as long as it is in your benefit.
    #56     Mar 23, 2021
  7. easymon1


    1. Trade With a System
    2. System has an edge
    3. System suits your market beliefs
    4. System suits your investment goals
    5. The system has been backtested.
    6. That system is part of a larger business plan treating trading like a real business
    7. Have practiced trading that system paper/small size/larger size monitoring for mistakes and reviewing all trades regularly.
    #57     May 4, 2021
  8. A backup plan to do something totally unrelated?

    Seriously the success rate in trading is abysmal. I know plenty of dudes who I used to think were doing great who’ve moved on to other pursuits. To not consider that possibility is up there with waiting for that pro sports scout to come around.
    #58     May 5, 2021
    comagnum likes this.
  9. easymon1


  10. Blaze


    1. A strategy with an edge. Without a model/strategy that has an edge, no amount of discipline, risk management etc will save you from losing money - you will still bleed albeit slowly. You must have an edge that is big enough to give you a profit after trading costs. This is the most difficult part of trading and hedge funds invest millions developing such strategies/models with an edge.

    2. The discipline to execute the strategy perfectly or as best as you can as a human. You may not execute 100 trades perfectly, but nothing less than 90/100 in execution.

    3. Solid risk management. You must risk a percentage of your account that is small enough for the probabilities to play in your favor ie to survive a losing streak. You must also have a basic understanding of correlation in markets for risk management purposes. You must be good at proactive and reactive risk management. Part of risk management is also knowing when to abandon a strategy/model.

    4. Psychology. You must have the mental fortitude to survive drawdowns and the self control not to increase your risk exposure when you are on a roll and feeling like a genius.

    I believe these are just the basics (in my opinion). There are many more things you need to do. If it was easy we would all be billionaires. However, step 1 (developing a model/strategy with an edge) is the most important aspect of trading that separates winners from losers. That's the secret sauce that Jim Simmons at Medallion would never disclose or Kenneth Griffin at Citadel. Without it, everything else is useless. From step 2 onwards is the infrastructure on which the strategy is executed and most people can learn that easily.
    #60     Jun 13, 2021
    persistence, meatyoaker and easymon1 like this.