If the plan is working, there won't be one. Edit: Unless one incorporates severe drawdowns into the trading plan, which doesn't make a whole lot of sense.
This is my answer, too. I had severe drawdowns when my "plan" consisted of 1) put on trade based on where price should go, and 2) hold the position (averaging if necessary) until it comes back to at least break even or hits this absolute disaster stop that's so far away there's just no way price will get there. :eek:
Ok, forget "severe" drawdown. Let's say a mild drawdown. I assume the plan accommodates this. The point is, can you handle the "mild" drawdown or do you fall apart?
As an intraday scalper, I consider more than three losses in a row to be an unusual drawdown I'm not sure what actual stats are among consistently profitable traders who trade based on a well-tested plan, but I suspect that scalpers rarely have losing days, day traders rarely have losing weeks, and short term swing traders rarely have losing months.
Depends on what you mean by "mild". But if the plan is thoroughly tested and consistently profitable, there won't be any unacceptable drawdowns, therefore no "falling apart". I know what you're going for here, but the fact is that most "plans" are neither thoroughly tested nor consistently profitable, much less both. Most traders don't even know (a) what a thoroughly-tested, consistently-profitable plan is, much less (b) how to develop one. And even if they did know (a) and (b), they probably wouldn't do it because it takes time and effort, and it's so much easier to just take a big bunch of it and throw it against the wall to see what sticks.
If I'm scalping in a range around a flat 5min 20EMA my typical target is 10 ticks. If I'm trading actual "in-plan" setups I shoot for minimum 20 ticks. If there's a key level in line to be tested I tend to hold for that test unless a double attempt fails, then the trade will turn into a smaller scalp.
you cant load more than 10 contracts with this kind of stops else risking htf will take you on. and if they do, and you start having losing days, more and more, what is the plan ? When do you stop trading ?
This comes from the age-old military wisdom: No battle plan survives contact with the enemy. The market can't exactly be regarded as 'the enemy' but it will do unexpected things and only adaptable traders will stay on top of it.