Trading Plan - basics and tips

[Garpal Gumnut]

As I said above , my basic trading plan atm is , with reasons.

1. To be out as we approach 5000 on the XAO, it is as likely it will retreat as break through and I've recovered due to buying RIO when it was low, from my losses last year.

2. Markets often make a double bottom in bear markets, and we are still in a bear.

3. If it does break through 5000, I'll wait for a retracement and further advance.

4. I will then and only then look at Sectors and then Stocks.

Its a plan.

Its not sophisticated.

A plan need not be sophisticated.

Any thoughts, and what is your plan atm.

gg

 

[Garpal Gumnut]

Can you guys start a new thread and let people comment on my recent posts.

gg

 

[Grep]

Any thoughts, and what is your plan atm.

gg

GG,
My plan is simple.The trend is up.I am 100% loaded long in all four ASX trading systems that I use.( 3 x weekly and 1 x daily).

I will stay long until the market starts moving down.

Cheers,

Grep

 

[Joe Blow]

Can you guys start a new thread and let people comment on my recent posts.

All off topic posts have now been removed and any future posts in this thread that are off topic will also be removed.

Back on topic please everyone.

 

[Garpal Gumnut]

GG,
My plan is simple.The trend is up.I am 100% loaded long in all four ASX trading systems that I use.( 3 x weekly and 1 x daily).

I will stay long until the market starts moving down.

Cheers,

Grep

I generally go with the trend but I find major levels like 5000 often pose a barrier to the continuation of the trend.

It often retraces, if not to the beginning of the uptrend, often to a fibonnaci level between.

5000 is a strong psychological number.

Trading the trend though I agree is safer, the trend is your friend.

gg

All off topic posts have now been removed and any future posts in this thread that are off topic will also be removed.

Back on topic please everyone.

Thanks Joe, gg

 

[Boggo]

My view of Basics and Tips.
I use two breakout systems and an Elliott Wave system.

The breakout systems are way in front at the moment mainly because they are long only and work with the current trend and don't operate unless there is a trend.

The EW system works both ways and has the advantage of proposing a possible price target.

These basic rules apply to all three of my systems...
- Know your entry
- Know your stop
- Know how much $ to risk
Get your trailing stop to breakeven when your close has moved to greater than 100% of the initial risk and barring some catastrophe you have a free trade.

The charts below highlight examples of the basics and the tips would be to stick to the basics (risk is $400 in both cases).

(click to expand)

 

[Boggo]

Follow on from post above, TOL hit $9.20 today, 1c from predicted level.
Stick to the plan (even if it takes ages )

Yesterday's chart...

 

[quinn123]

I would be surprised if any successful trader would post up there trading plan because it takes a lot of time and experience to produce a trading system with positive expectancy and high opportunity. I would love to see a basic trading plan though. Just something I could use as a template to help refine my own.

I'm a EOD trader and only trade to supplement my income. I allocate 2 hours a day to my trading business. I'm basing my trading system on trend following using technical analysis. My goals may be largely different from some of you.

The goals of my trading plan are:
1. Handle the psychological aspects of trading
2. Have stringent entry/exit, risk management and money management criteria
3. Work in all market environments (dynamic vs static)
4. Use only technical analysis with some fundamental filters in my screener (filter)
5. Beat the average market return

I'm currently stuck at 3. Do you guys have a trading system that will alter as the market changes from trending (up/down) to trading in a range (sideways). Is this something I should shoot for or is it just a pipe dream? Should I just be out of the market when it is going sideways? I'm at the stage where I'm tempted to search for the holy grail of entry methodology but I don't let myself get pulled into that trap. I'm spending 90% of my time on 1. & 2. because I think they are what really matter.

Cheers

Michael

 

[It's Snake Pliskin]

I would be surprised if any successful trader would post up there trading plan because it takes a lot of time and experience to produce a trading system with positive expectancy and high opportunity. I would love to see a basic trading plan though. Just something I could use as a template to help refine my own.

I'm a EOD trader and only trade to supplement my income. I allocate 2 hours a day to my trading business. I'm basing my trading system on trend following using technical analysis. My goals may be largely different from some of you.

The goals of my trading plan are:
1. Handle the psychological aspects of trading
2. Have stringent entry/exit, risk management and money management criteria
3. Work in all market environments (dynamic vs static)
4. Use only technical analysis with some fundamental filters in my screener (filter)
5. Beat the average market return

I'm currently stuck at 3. Do you guys have a trading system that will alter as the market changes from trending (up/down) to trading in a range (sideways). Is this something I should shoot for or is it just a pipe dream? Should I just be out of the market when it is going sideways? I'm at the stage where I'm tempted to search for the holy grail of entry methodology but I don't let myself get pulled into that trap. I'm spending 90% of my time on 1. & 2. because I think they are what really matter.

Cheers

Michael

You might not get anyone posting up a trading plan that is not for someone other than the original developer or constructor. However, there are books and resources to be found. If you go to the ASF bookshop you can find this book:
Smart Trading Plans
by Justine Pollard
Paperback
264 Pages
2008
ISBN 0731407865

I haven't read it and do not intend to read it. But it may be what you are looking for in regards to templates.

 

[Wysiwyg]

I'm a EOD trader and only trade to supplement my income. I allocate 2 hours a day to my trading business. I'm basing my trading system on trend following using technical analysis. My goals may be largely different from some of you.

How's it going. I am similar to what you posted. My present phase is with Amibroker and mechanical systems. I am becoming more disillusioned the deeper I delve into the rabbit hole. I have spent the last few month testing other code creations and none so far are above normal or worse. However I have experimented by adding pieces of some code with my own creations from a limited code knowledge to get slightly better results but this could be curve fitment which is the another trap.

I am starting to feel I am chasing my tail so to speak as in my opinion a coded strategy that works is rare, very rare. The reason being is because one size doesn't fit all and as you noted the time to be in a trend participation is when the indices are running. In this case a buy and hold strategy would work well anyway.

The other block I'm having is with exits. Entry is fine, stop loss is fine, money management much improved but coding the right exit is difficult because every stock behaves differently.

In conclusion. The stock market isn't easily quantifiable by a piece of computer language. Should I continue chasing my tail? I will continue for a further while and gather some knowledge along the way.

 

[quinn123]

Hey,
I’m in the early stages of developing my trading sytem and I’m usure of what expectancy it will produce becasue I do not have enough data. I use incredible charts for charting and excel for bookkeeping and money management.

I have made a decision to not go into backtesting with amibroker. I’m not going to attempt to produce some coded strategy for the markets because I don’t believe that holy grail exits. It would require a “Neural Net CPU, a learning computer" (Terminator) because the markets are always changeing. This is only my belief though and I’m open to suggestions.

From what I have learnt there are three basic requirements for a trading system:
1. Money management - keeps you in the game long enough to either become profitable, lose slowly or go nowhere
2. Risk management – Deals with how your system will react to varying market conditions
3. Entry and Exit methodology - Techniques you employ to enter/exit trades. I only want to enter high probability trades. I want a exit strategy that tells me when to stick with your guns, when to walk away and when to run away.

I think the easy ones are money management and entry criteria because its all basic maths and statistics.

Risk management and exit methodolgy is bloody hard and I’m spending most of my time on this as well.

 

[Garpal Gumnut]

As I said above , my basic trading plan atm is , with reasons.

1. To be out as we approach 5000 on the XAO, it is as likely it will retreat as break through and I've recovered due to buying RIO when it was low, from my losses last year.

2. Markets often make a double bottom in bear markets, and we are still in a bear.

3. If it does break through 5000, I'll wait for a retracement and further advance.

4. I will then and only then look at Sectors and then Stocks.

Its a plan.

Its not sophisticated.

A plan need not be sophisticated.

Any thoughts, and what is your plan atm.

gg

I never thought the market would head down so quickly since I posted this.

Looks like I was correct.

I'll get the ole Fibonnaci out to see where its going to stop.

gg

 

[Ron88]

You might not get anyone posting up a trading plan that is not for someone other than the original developer or constructor. However, there are books and resources to be found. If you go to the ASF bookshop you can find this book:
Smart Trading Plans
by Justine Pollard
Paperback
264 Pages
2008
ISBN 0731407865

I haven't read it and do not intend to read it. But it may be what you are looking for in regards to templates.

Hello! I think you should read it. I have read Smart Trading Plans and it is an excellent book - it also has a basic trading plan included in it and all the info you need to put your own together. You get a word document you can download that is a trading plan template and that goes with the book. The book really assisted me in finishing off my trading plan.

In hindsight, the book did not only help me as a trader but as a person as well. You see, the book does not only help you with charts and figures, it will help you know yourself (as a person; e.g. your attitude, your personality, your psychological orientation) which is significant when you are already out there trading.

I just completed her Smart Trading Plan & System Development course in which she shares all her trading systems and strategies and gives out the MetaStock codes to her systems and her trailing exit indicator. It really helped me to refine my trading system and exit strategies and is the best course I have found that gives you real information from a trader.

 

[Mr J]

I would be surprised if any successful trader would post up there trading plan because it takes a lot of time and experience to produce a trading system with positive expectancy and high opportunity. I would love to see a basic trading plan though. Just something I could use as a template to help refine my own.

Buy at support, sell at resistance. As TH might say, it's a cliche, but it is my trading plan.

 

[quinn123]

That's like saying buy low, sell high. Sure that's what you have to do at the end of the day to make money in an individual trade but its how you go about it that determines your success.

Buy at support, sell at resistance. As TH might say, it's a cliche, but it is my trading plan.

Its a great plan though if you apply it in the right way.

 

[Mr J]

That's like saying buy low, sell high.

Yes and no. Yes because it's a common, seemingly generic statement and unlikely to help, and no because it is actually quite specific. It shows where I buy, where I sell, and conclusions can be drawn on where I exit. Yes, some small details are missing (such as my exit strategy not being that simple), but it's enough to build a strategy around.

 

[DocK]

I never thought the market would head down so quickly since I posted this.

Looks like I was correct.

I'll get the ole Fibonnaci out to see where its going to stop.

gg

What did you come up with GG? I don't think I'm applying the indicator in the correct way on my charts, and wouldn't mind a comparison.

I think I'm quite similar to quinn123, in that I have the risk management rules and position sizing rules set, and have been sticking to them religiously. Unfortunately, due to the sideways movement of the market prior to the Santa rally late Dec, I was sustaining several small losses on my short-term system, and a fair bit of whipsawing. I know that over time my systems will be profitable, but the periods of consolidation are very frustrating. This is where I need more knowledge/experience or a different strategy. I find myself tempted to tighten up stops in order to protect open profits - which in hindsight would sometimes have been the right decision, and sometimes the wrong one! Of course with hindsight it is easy to say "yes, the market was going nowhere for a few months so a trend-following system was not going to achieve great results". When you're in the midst of it my thinking is more along the lines of "If I tighten up my stops the market will no doubt have a minor correction prior to resuming an uptrend - and I'll be out of it, but if I leave my stops where they are there could be a larger correction or the resumption of the downtrend and I'll give back a fair bit of profit prior to my stops being hit".
I generally waste several hours vacillating, and in the end decide to trust in my system and leave my stops where they were set. It's the "letting your profits run" bit that is hard to stick to at times. I guess I'd like to be able to recognise or "predict" a change in trend much sooner in order to have my cake and eat it too.

 

[Trend Hunter]

Hi All
This thread on trading plans is an interesting thread, as its often the area many traders struggle with, maybe not quite knowing what actual needs to be in a trading plan.
A trading plan needs to be detailed enough that you know what action to take before it happens. But at the same time it needs to be simple enough that someone else could easily follow it.
The main Points to cover are:

• Life goals
• Trading goals
• Entry system
• Exit system
• Trade Order Management
• Money Management (including Market Mode & Sentiment Analysis)
• Process of finding new trades and Open position management
• Your success profile (to build consistency)
• How you measure your performance for improvement
• Daily Routine
• What you will do for your Countinuous Education

I am writing a series of articles to help traders with this process of developing their own trading plan. I hope its helpful.
The first article is called "Top 10 questions a trading plan must answer" and can be found on my website below.

Cheers,
Cade

 

[stevo2]

I just completed her Smart Trading Plan & System Development course in which she shares all her trading systems and strategies and gives out the MetaStock codes to her systems and her trailing exit indicator. It really helped me to refine my trading system and exit strategies and is the best course I have found that gives you real information from a trader.

Hi Ron, long time since your post and I'm wondering if you or anyone else has traded Justines method for any length of time, if so how has it worked out?
cheers ian