So in other words, you're saying a pattern (or TA generally) is not going to bring any success, and that the 'Trade Plan' has a higher impact on outcome? By 'Trade Plan' I read trade management.
I find this thesis quite naive if you dont mind my saying. Surely nobody who has any genuine experience in this game can seriously think that all it takes is to find a few 'recurring' patterns, build some trade management rules around past outcomes of the scenario (curve fitting), and expect to make money over the long haul. Have I understood you correctly or am I the one who is naive?
Yeah, you misread. I named two specific things examples out of many things in a trading plan. Trade management is another thing but I didn't use it as an example to prevent someone from thinking its the only thing. Instead, I mentioned two things that most traders have problems talking about. Oddly you thought that's what I said even though my examples were discipline and risk management. Lots of stuff in a trading plan...there's no one thing. I only mentioned the two above due to time restraint. Everything else involved in a trading plan is mentioned in my other posts at this forum. Simply, lots of stuff besides just patterns or trade signals.
Thanks for the reply. I guess were just at different ends. I dont believe in trading plans in the way most here seem to. The plan is to make money. Thats it. I dont need to write a plan to remind myself not to bet the farm fighting a trend. Thats common sense. Ive been around long enough to appreciate I do better when Im in the rhythm of the market so to speak, and putting constraints in the form of a plan on what I should or should not do or what I think the market should or should not do at any point is a quick way to the poor house. Sure, have some guidelines, but Im not rules 1,2,3.. to be followed like a recipe. Recipe for disaster! Indeed - look at the journals you mention of all the people trading NQ or other dross with the same method/approach/plan/method. Not one of them can make a dime. Not one. Its a very sad state of affairs and they are seemingly encouraged by 2 crooks - noidea (i mean nodoji) and some other twit whos name escapes me.
Doesn't matter if your trading plan is memorized, written down or step 1, 2 and 3. From my experience via in-depth conversations with institutional traders to retail traders...trading without constraints and rules...eventually leads to trouble. In fact, I've never met a profitable trader without a trading plan. The point is this...you gotta have one. Not possible to succeed consistently without one. The other point about something I said that you overlooked or misread. You gotta be able to adapt and that implies you're not rigid to step 1, 2 and 3. It also implies "rhythm of the market to speak" when ever needed. Reality, most newbies don't have enough experience to trade like that. Therefore, they shouldn't attempt such until they have enough years under their belt to know when to trade as such and when not to trade as such. Simply, I'm very careful about things I say to someone that's obviously a newbie versus someone that's an experience trader. I wouldn't be telling an "experience trader" you gotta have a plan if you know what I mean because its obvious he/she has something especially whenever I see them talking about other things in a trading plan. The journals I've read...I haven't really seen any "trading plan" discussions beyond someone saying I use stops, I don't use stops, I go with the flow, I use trendlines, profit target is that, Long here, Short there type of language. I don't consider such a trading plan. Instead, just a tiny piece of their trading plan. Most folks here do not explain everything in their trading plan if they have one. They just prefer talking about their trade signals. Yet, the ones that don't have any trading plan...they are obvious and then when you pick their brains for a few months while they're losing...they finally admit they were just trading via the "seat of their pants"...no trading plan beyond just a trade signal strategy. There's more to profitable trading than just trade signals. P.S. Two traders using the exact same pattern on the exact same trading instruments but getting different results...bad or good...it only implies one thing. They're using different trading plans considering the trade signal strategy is the same. That's something I commonly see in the journal threads in the past...not sure about recently considering I don't read to many of them now.
Gotcha! OK, I get where youre coming from. I didnt want to get hung up on semantics and stuff which is perhaps a problem sometimes in the forum context. Sure youve got to have some 'idea' or ethos upon which to base a trade as well as risk limits and the other obvious stuff.
%%%%%%%%%%%%% Agree with most of what has been written. Put it simple,Interstate 40..... works well for millions in TN+ TX, but can get real crowded, crawls but seldom become a ''parking lot''[stops working]. However a 200 day moving average is NOt as precise as I 40; but still real l useful even if crowded. Trading- investing can be difficult, or easy sometimes -LOL; so a pattern could-sideways slop-chop , you to ribbons,in a sideways trend . But markets resume[work] later into bull or bear trend. So short answer, in a practical wise sense =yes. Thanks for question, mr 911.
I know traders with plenty of as you call it "genuine experience" who have made a lot of money this way. Guys in the business 20+ years. Still crushing it. Guys with plenty of AUM. They have great discipline and risk management skills on top of an excellent strategy.. Unlike others who have some kind of wacky strategy and leg in 6 times as the market goes against them until they finally get bailed out.
Wow......you have to be one of Surf's aliases. You created this one 10 days ago...nice work. ET should institute a new rule, new members can't post for 2 weeks. Keep these aliases out of here. You are saying people who follow rules and use risk management are going to the poor house. Perhaps the most hilarious and yet at the same time worst idea/advice/post ever written on here. Good ole Surf. Back to using aliases again. Attacking others who actually trade. Someone is looking to get banned again.......
No, not "lots of stuff" in a trading plan. A basic trading plan has three components: entry strategy, exit strategy, trade sizing strategy. That's it. Risk management aka money management is the trade sizing strategy. Also known as position sizing. Discipline is not a part of the trading plan. It is what you need to implement the plan and it applies to every step of the plan, but nobody writes down "apply discipline here." That's crazy. Discipline is like breathing. Without it you can't execute the plan but it is really external to the plan. Each step can be made more complicated (e.g., scaling, stops, regime switching) but the bare bones are entry strategy, exit strategy and risk management (position sizing).