Develop and follow a written trading plan

Discussion in 'Trading' started by Chuck Krug, Feb 20, 2018.

  1. jinxu


    It's another word for systematic. I think "mechanical" was the go to word in the community. It's been awhile since I've googled trading advice articles or read any trading books.
    #31     Feb 20, 2018
  2. wrbtrader


    This isn't philosophy.

    Get a group of traders together and then give them the exact same trading plan...via your Short the upper boundary.

    I guarantee someone in that group will have different perception about where and when to Short that upper boundary although Shorting the upper boundary is the exact same trading plan. A discretionary decision making especially when they are thinking about their own real money that's on the line...its human nature.

    I think that's why traders that are not automated will say that trading is part art & part science.

    Seriously, you will not be able to find two traders using the exact same trading method while not automated...producing the same trade performance results when real money is used. Maybe you will get similar performances in simulator, manual backtesting but not real money.

    #32     Feb 20, 2018
  3. Intuition is gambling in trading.
    Kind of follow the trend, it's your friend after all. -- To succeed in trading, everything is a hybrid of a hybrid, unique discretionary approach, o_O

    The trading truly part art, part science, -- each new day, or chart, you perceive and view and judge it,
    That's why so, extremely difficult to survive and thrive fruitfully for alot of people.
    ET 2018
    Last edited: Feb 20, 2018
    #33     Feb 20, 2018
  4. jinxu


    I didn't say I use intuition during the process of actual trading. But you do need it. Especially during the system development stage. You need a lot of it if you want to connects those dots in less then 7 years.

    Anyway, this is more then enough ET then I wanted to spend today. I'm running out of Movies and TV shows on Netflix to keep me occupied. It's almost beer time now.
    #34     Feb 20, 2018
  5. %%
    I like a 200 period moving average, less commissions.
    But I just thought of a time i walked [ fast]under a ladder,LOL, daytime, because i would have to walked out in street. So when i saw a change like that, had to ignore my feelings+ walk fast under the ladder, no bad luck/gambling involved, but plan to never walk under a ladder if i dont have to:cool:
    #35     Feb 20, 2018
  6. Hello speedo,

    What I am learning is the market conditions can change all they want, but I still control my risk per trade per market conditions.
    #36     Feb 20, 2018
    vanzandt and tomorton like this.
  7. speedo


    #37     Feb 20, 2018
  8. Very thoughtful and logical write up.

    But how can one obtain a sound trading plan without evaluating the performance metrics (R:R or expectancy, etc.) pass trading results? Past results may not be the predictor of future results, but atleast its a hope/prayer/chance of making money based on some evidence in the past.

    I don't see the sense in trading if I can't find a trading plan that can make money every month in the past.
    #38     Feb 20, 2018
  9. tomorton


    That's fine, combining your two last posts, you use a plan that has definitely worked in the past (you don't use one that definitely failed in the past) but your version of the plan takes account of the possibility that it might not work so well in the future so you need to protect against heavier losses than past performance predicts. Hence, you have a new plan.

    But without a written plan with defined criteria and risk management rules, you're just guessing (or fooling yourself you're so brilliant you don't need a plan).
    #39     Feb 20, 2018
    comagnum likes this.
  10. comagnum


    The best traders are good with self appraisal. Most of them keep detailed trading records going way back & know the good, bad , and ugly of their metrics along with every nut & bolt of their trading plan like the back of their hand.

    When I was new to trading I was not doing any of the above mentioned things . I would try to forget about my losing trades, I was deceiving myself into believing my loses were not so bad until I blew up.

    My trading plan, trade log, & daily journal entries keeps me on track & prepares me to deal with the inevitable draw downs yet to come. The trader wins or loses the game, their choice of entry signals has little to do with it.
    Last edited: Feb 20, 2018
    #40     Feb 20, 2018
    slugar, wrbtrader and speedo like this.