Trading Plan

[Brumby]

If you don't have a reason you're probably relying on luck or very clever money management, so it's probably better to have it identified.

I completely agree with your comments that there needs to be one.

Interestingly 99 % of trade ideas posted on this forum don't have a trade rationale. Is my observation too unreasonable or traders just don't care?

 

[dbphoenix]

Interestingly 99 % of trade ideas posted on this forum don't have a trade rationale. Is my observation too unreasonable or traders just don't care?

If one believes that the market is random, why bother with a trading plan?

 

[Quantt]

Back in 2005, I paid $5000 for a mechanical system that basically trades fear and greed as measured by extended RSI readings. The whole mechanical system was based on more than 10 years of research data. Essentially the money was for the research data on the universe of US SP500 and Nasdaq stocks. I traded it briefly and abandoned it primarily because it requires no protective stop for it to deliver the expected results and also the trading hours were just in conflict with mine in Australia. The premise of the system was for a reversion to mean. Although the research period and population size was extensive, I don't think it caters for a black swan event. No research data ever does.

Someone selling a system should have been the red flag, working system is the quintessential lifestyle business with no customers, no employees and no investors and location independent... so I am yet to meet a sane person selling a good system...

For the "black swans", it always matters how "black" is the swan isn't it? For example if the market opens tomorrow let's 50-60% down, I am going to be OK and can even make money, but if the market don't open anymore, I don't think making money will be the problem... in this case you'll need good friends and a lots of guns to hunter/gather whatever you need to survive...

 

[joseph1986]

/

Someone selling a system should have been the red flag, working system is the quintessential lifestyle business with no customers, no employees and no investors and location independent... so I am yet to meet a sane person selling a good system...

For the "black swans", it always matters how "black" is the swan isn't it? For example if the market opens tomorrow let's 50-60% down, I am going to be OK and can even make money, but if the market don't open anymore, I don't think making money will be the problem... in this case you'll need good friends and a lots of guns to hunter/gather whatever you need to survive...

discipline vs. skill/system accuracy
discipline wins hands down every time. You get over ambitious in the beginning then you realize you're swimming with sharks. I think that it's wise that we devote more time to risk management and how to increase position size week by week and less time on "my system is this accurate".

 

[Quantt]

discipline vs. skill/system accuracy
discipline wins hands down every time. You get over ambitious in the beginning then you realize you're swimming with sharks. I think that it's wise that we devote more time to risk management and how to increase position size week by week and less time on "my system is this accurate".

Yes Sir, very well put... I have red somewhere about a study with great risk management and stocks chosen with darts you can still make money...

 

[RachasfromPortugal]

This kind of questions are typical of looser traders.

Sorry for my honesty.

 

[dbphoenix]

This kind of questions are typical of looser traders.

Sorry for my honesty.

The word is "loser".

You may want to dial it back a bit, Rachas.

 

[RachasfromPortugal]

The word is "loser".

You may want to dial it back a bit, Rachas.

Sorry about that.

iam Portuguese.

 

[Quantt]

Sorry about that.

iam Portuguese.

I am from the Moon, so we won't hold that against you