i think trading plans are important for successful trading. it gives you some accountability and some legitmacy as a business. if you really put the time into your trading plan, you should have a very useful document that you can incorporate into your daily business routine as a trader. my trading plan is a work in progress, but when it's all said and done i will have one and trade by it. fwiw, here is a thread with some links regarding trading plans: http://emini.deltat1.com/forum/topic.asp?TOPIC_ID=667 i think trading plans are probably like trading - to each his own. if you decide to use a trading plan, like your trading style, pick a trading plan format that fits you. otherwise, it is likely to end up just another gimmick that will be discarded or worse detract from your trading. create a trading plan you can really believe in, really trust, and really follow. hth take care omni BTW: yes, i know some very successful traders who do not have a written plan. they have been trading for decades and they also recommend anyone getting into the business to draw up a trading plan.
Well this is interesting, surely, unless you are a quant, you couldnt really define the mathematics involved. Ive never been able to get a paragraph into a trading "plan" without it sounding like meaningless gobldygook, at least with an integrated technical approach. It always seems to come back to the following rules, no matter how i try and segment it, or integrate it into an overall plan. 1. Look at the chart 2. Set some stops, or not. 3. Manage exits on their merits. Thats as far as i get.
You just wrote your plan, it will morph or not as you learn or the mkt changes or some degree of both. Many times people can't put into precise words what they are doing even though they are doing something fairly precisely.
I'm with most of the other respondee's. My plan is a set of rules that I developed during my paper trading and am now putting into practice and will adjust as necessary. My rules tell me what to enter, when to enter, when to exit, what to do after a winning trade, what to do after a losing trade, how much to risk, how to use reserves, when to withdraw profit, and when to quit if my overall trading doesn't work out.
I have been trading since 1999. I have been a professional trader for each of those years. A trading plan is like an essay, its more powerful as you simplify it, and cut out the fat. Keep it as simple as possible, but not simpler.
How many here actually have a Trading Plan? If you have to ask this question, it means that you aren't there yet. Profitable trading is such a complex endeavor that talking about "a plan" is meaningless, unless you mean by this a complete detailed description of your ways. Did you also make a plan for breathing or loving? A "plan" sounds simply too simplistically unexperienced. You must have stumbled on a quant that knew how to turn a profit.
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=966152> Like buy at green and short at red.
I keep a notebook where I have a more concrete set of rules (that can change at any time, although only aftermarket), and I also then write my thoughts down daily. I like to make sure I clearly remember anything new that happened during the day, so I can review my plan nightly and adjust accordingly. Some plans may be quite specific, if you are a systems trader, but mine is more to keep me from doing something stupid. It certainly helps keep the losers small, and that's what I am concerned with. As one of the earlier posters mentioned, I believe that a good routine is a definite asset. It keeps you focused day in, day out, without having to get worked up about anything.
Everytime i've deviated from my rules, i've fucked myself. My biggest losses came from when after looking at a chart briefly, i said "fuck it, let's try something." and then lost about 70% of money in. That hurt. My rules: Don't open a position before 10:30. Don't force a play. Check the charts twice before opening a position. Set a stop loss when you open the position. Raise your stop loss to protect profits, but NEVER lower it. Don't let a profit become a loss. I've generated these rules after a years worth of learning and getting burned. Each time i've ignored one of my rules, i got burned. Another thing i've learned is don't worry about making profit, just make good trades. The profit will come along for the ride.