Trading Plan Template

This is a discussion on Trading Plan Template within the Educational Resources forums, part of the Commercial category; Originally Posted by Chicken Curry What do you consider to be the most predominant determining factor Charlie ? Is there ...

Reply
 
LinkBack Thread Tools Search this Thread
Old Jan 22, 2006, 6:03pm   #33
Joined Jun 2005
Quote:
Originally Posted by Chicken Curry
What do you consider to be the most predominant determining factor Charlie ?

Is there one factor for you that stands out above all else ?
no, not 1, but quite a few things. i wont mention them all here, as the likely hood is that posts and threads get deleted often round here so i would only be wasting my time.

being able to pull the trigger would be 1 though - overcoming your bias and emotion - your opinion of what you think the market will do v what the plan says to do.

a poor plan well executed is more desirable than a great plan poorly executed. an old management/marketing saying with some truth (for once).

also, knowing when to go against the plan. rules are for breaking.

any plan or mechanical system focuses the attention to a particular condition which inturn switches off the awareness to other information the market is saying - where there could be more profit. perhaps this is the later stages of development

these 2 points contradict of course.

flexibility is key. know when to stick to your plan, but also when to change it. no plan works for ever.

does the trader know (planned) for when this is?

im not trying to say there is no place for a plan at all. there is. i m just saying it is one part of the issue.

we tend to go from developing comprehensive trading plans for the whole business, to daily plans for the markets we trade, then to no plan - just a set of guidelines we intuitively know and understand. they become part of us.

there is a lot of stuff on www.elitetrader.com about goal setting, plans etc.

dpb - there are no way near 50k members here. many of them are created by the owners to make the place look more active and bigger than it is - i am sure. this is probably done to increase advertising revenue. when we look at who is advertising here though v 'the other site', it becomes clear where the big names in the industry want their names to be seen.
__________________
hope is not a strategy
charliechan is offline   Reply With Quote
Thanks! The following members like this post: wasp
Old Jan 23, 2006, 7:01am   #34
Joined Oct 2005
Quote:
If you never stop rationalising your inability to begin, then you'll never begin.
A very pertinent comment.
Chicken Curry is offline   Reply With Quote
Old Jan 23, 2006, 11:25pm   #35
 
NAVELESE's Avatar
 
4 Posts
Joined Jan 2006
on the tightrope

Hi all,

Had my first decent day trading today. Am using a free charting program called Medved Quote tracker, seems OK for my needs at the moment is available on
http://www.quotetracker.com/
Have taken on everyones comments thanks.

Charliechan, thanks for the site, a post there led me to
http://www2.barchart.com
Another free site which seems pretty useful. Loads of different types of analysis of shares. (Think is only 4 US shares though )
Have used Tim's template for a good sound basis, and am working on filling my gaps in knowledge. Helped whilst on the tightrope.
Was good to live trade with charts, and items that I have read on this site started to make some sense at last..
Still will be down overall though on all my trades so my monthly aim is to get back to square one. Have realised shares are not get rich quick unless you are willing 2 put in some time and work in... (think u r more likely 2 lose)


Navalese
NAVELESE is offline   Reply With Quote
Old Jan 24, 2006, 2:01am   #36
 
frugi's Avatar
Joined Mar 2003
Tim,

Forgive me if I speak bluntly and and at tedious length.

One trouble a person has when (s)he engages in the market is the boundless abstraction it presents. I'm not referring to the "random" vagaries of price action, as that is a problem to tackle later - indeed delving into the "why" behind price action is probably the greatest joy trading can offer - but rather the fact that the trader must impose some boundaries and rules onto this great heaving mass that represents a small group of humans taking money from a larger one. This imposition of structure is the "boring" bit that we all have to go through first before we can be allowed to tackle the sublime crossword on a mentally even footing with the predators.

There are, literally, endless ways of dipping your beloved metatarsal into this foreboding soup. You can choose intensely to scalp size for an hour a day with the intuitive feel (which must be earned through hour upon hour of gruelling experience that eventually becomes stamped into the subconscious) of an air traffic controller who regularly juggles 15 angry 747s safely onto an icy runway, or you can perhaps trade with supreme objective aggression once a year with 10% of your capital, but only when everything perfectly lines up with a vast number of esoteric rigorously backtested criteria.

The point is that you have to decide where you fit in and that is, I think, the purpose of your excellent template. It is clear that you have grasped this perennial traders' problem. So don't worry so much about how the market works for the moment. The important thing is to decide on an approach first and then conduct your testing around it. The price action which is relevant to your chosen approach will then slowly reveal itself, because you will be comfortable, in your element and downright eager to watch, test, hypothesize and refine your plan till the heifers come home. Because you have chosen a comfortable niche the idea is you can remain objective and unlock all your ability to concentrate intensely, but also cooly, almost passively. This is simply not possible when you're flitting around from instrument to system to time frame. Set some boundaries, then focus freely. Of course there is a paradox here: how can you possibly decide where you fit in without trying a number of approaches? Well, that's where section 5 of your template comes in, as db mentions. He's not trying to be antagonistic or unhelpful, I think, rather saying that only you can answer the questions within it. Question yourself mercilessly based on previous experience. If you don't know the answers to some then at least choose some that don't seem to contradict the grain of your personality and knowledge. At least then you will have a framework in which you can progress to the interesting stuff, even if your initial choices prove ultimately to be a little off message.

For instance, how patient are you? Do you like making quick, repetitive decisions or do you like to sit back, diligently sift data and only strike when the iron is suitably hot for tackling linen? Do you want results in the next minute, the next hour, the next day or the next few months? Perhaps you can entertain a combination of two or more depending on what the market has presented.

Do you lust after a rollercoaster, something more sedate, or something in between?

e.g USD/JPY / a utility / the Dow

How much information can you process at once? Is price action alone enough (?Forex), or would you like some confirmation such as volume, breadth, tick, put/call, sectors, lev 2 etc.?

Do you want your product to be very or less vulnerable to news? (single stocks / forex / indices).

What about leverage, liquidity and popularity? Futures / fat stocks/ ickle stocks , for instance.

Anyway, I witter inaccurately, but I hope I'm making some sense. For each and every niche, there will be a corresponding and sensible way of managing your risk and maximising your reward.

Answering this sort of question, which I will patronisingly emphasize yet again as being DEEPLY PERSONAL, will narrow your chosen field of battle down considerably.

*take this with a pile of salt* - If you subscribe to the view that all price action is fractal (there is no such ting as noise) then in some ways it really doesn't matter which time frame you choose, as long as your money management is consistent with the R:R available. Have a look at a daily chart and pretend it is a one minute chart. They look much the same really. So, all you have to do is decide where you fit in and then scale your positions accordingly. e.g I can't handle waiting days with a 50 point stop, a 200 point floating target and a little 1 lot on the line. I'd rather find out much sooner what my fate is, so I'll trade 10 lots with a 5 point stop and a 20 point target, repeatedly. Ignoring scaling in/out etc. Gross oversimplification I know. but I hope my message is clear. You will know where you feel (un)comfortable.

Don't you just hate it when you know what you're trying to say but can't put it into words?

Anyway, I had a crack at the first question. Your template is demanding and seeks savage self-questioning, as it should do. I have probably done it a disservice by answering in a facile manner.

I want to be a trader because -

I value autonomy extremely highly
I am an atrocious team player, especially when it involves following company protocol with which I am uncomfortable
I am introspective and enjoy working abstract problems out by myself
I am an INTP personality
I relish a challenge, especially one that is palpably different from more conventional forms of work. Every day can be wildly different on the surface, yet the underyling forces are always the same. This is the sort of delicious paradox that sets my etiolated brain racing.
I don't require public recognition of my capabilities
I relish the notion of being paid purely to think and act decisively
It is absurdly easy to keep score of my performance in a concrete, binary way (P/L)
I admire the abstract, intangible nature of the business. Virtually no overheads, no physical raw materials or end product, no pollution, no employees, no hard sell, no dependence on demand for my product, no creative/artistic torture as, say, a writer or painter might suffer, no travel, no meetings etc.
There is immense scope for career and skill development

My primary objective is to provide an income sufficient to support myself, with the potential to increase this with no fixed boundaries as my skill increases (as opposed to an income that increases proportionally with the hours I work and/or my place on a conventional career ladder)

These objectives are important to me because I am not content with spending my life on a treadmill. I have little interest in creating or maintaining a certain status level in the eyes of others. I value freedom (although ... "Seek freedom and become captive of your desires. Seek discipline and find your liberty." --Frank Herbert)

I believe I can achieve these objectives because I am diligent, disciplined, creative, intuitive, empathetic and capable of rigorous analytical thought. Okay I heinously flatter myself, but beware the self-limiting belief!

---

All well and good. But personal, rather boring/irrelevant to someone else and doesn't tell me how I should be positioning myself in the market. I won't bore you with my answers to the other subsections 5.x, especially as some are "after the fact", as it were. But fear not, answer the sections you haven't completed yourself, honestly, and I think you will be surprised at what you learn. Just dive in and do it. The next stage will become clearer only when you have sorted out your initial niche as it relates, for instance, to your personality and risk tolerance.

Then you can worry about what those nasty big boys with their special smart currency are up to.

Please tell me to insert a sock in any orifice you choose if all this wittering is as useless and patronising as I suspect it may be. As usual I have used 500 words where 50 would have sufficed. And thanks once again for your template - it has been a joy to revisit and thanks to it I have discovered more than the odd patch in need of darning in my methodology, that's for sure.

Start a journal please, Tim, whether I public or not (I'd recommend private myself as there will doubtless be vultures eager to piggyback your resultant edge/method if they can) and don't whatever you do feel that you need do so in a certain way. The questions are Waterford clear and the answers, at least to the observer, cannot be right or wrong.

I am as guilty as anyone of flitting from product to system to timeframe to approach in my career and I can state with no shame that after a cornucopia of losses things only turned around when I concentrated my efforts in a small, psychologically comfortable area and damn well stuck to it. The techniques naturally follow.

Best of luck mate.
frugi is offline   Reply With Quote
Thanks! The following members like this post: scopelewis , wasp
Old Jan 24, 2006, 3:28am   #37
 
nine's Avatar
Joined Sep 2003
Quote:
Originally Posted by frugi
Tim,

Forgive me if I speak bluntly and and at tedious length.
<< >>

Best of luck mate.
Good post Frugi. Worth reading and may explain part of why it takes people some years to find their niche and trade successfully.
nine is offline   Reply With Quote
Old Jan 24, 2006, 3:03pm   #38
 
sandpiper's Avatar
Joined Sep 2003
Great post frugi.

Now you see them, now you don't... Where's all the posts gone?

Anyway, reading this thread reminds me of one of Koppel & Abell's anecdotes regarding a woman who consulted a family counsellor regarding her marital problems.

"Do you have grounds?" asked the therapist. "Yes," replied the woman, "Two and a half acres." "No," he replied, "I mean, do you have a grudge?". "A grudge?" answered the woman. "No, but we have a carport." Growing more frustrated the counsellor shot back, "Does he beat you up?".

"Beat me up?" came the response, "Hell no! I'm up an hour earlier than that old dog every morning!".

"Mrs. Brown!!" exclaimed the consellor, "You are seeking help from me because of of a problem you are having with your husband. For God's sake what is his problem?".

The woman hesitated for a moment and then unloaded, "The man just doesn't know how to communicate!".


Anecdotal gibberish aside..... I agree with chuckiechans sentiments re: the tightrope. However, it is undoubtedly true that "state of mind, focus and personal belief systems" are the deciding factors in whether you hack it and not trading systems or methods. I believe that what Frugi and db are eluding to is that it isn't about developing a plan to teach you the mechanics of crossing the tight rope, it's about developing a plan that examines whether you can really be arsed and if you can, allows you to develop the confidence, beliefs and mind set necessary for crossing. Whether you then cross a tightrope or walk on hot coals or go white water rafting is irrelevant.

This post will self destruct in 5 minutes......
sandpiper is offline   Reply With Quote
Old Jan 24, 2006, 3:19pm   #39
 
frugi's Avatar
Joined Mar 2003
I love jokes like that.

After my wordy flailing, the elegant, concise paragraph after the joke finally grabs the distinction by its proverbials. Certainly sums up what I was alluding to. I only wish I'd written it. Cheers sandpiper.
frugi is offline   Reply With Quote
Old Jan 24, 2006, 5:32pm   #40
 
sandpiper's Avatar
Joined Sep 2003
Quote:
Originally Posted by dbphoenix
Since, on the whole, they amounted to clutter, I deleted them. Hope you weren't too discombobulated.

--Db
I was. But I'm sure I'll recover. Thought perhaps you'd absquatulated for some reason...
sandpiper is offline   Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Similar Threads
Thread Thread Starter Forum Replies Last Post
A Trading Plan - You MUST Have One! timsk Home Trader 79 Jul 28, 2011 11:34am
Trading Plan Anthony24_7 First Steps 17 Sep 9, 2005 9:34am
Trading Plan/Analysis aricho Psychology, Risk & Money Management 0 Jul 16, 2005 2:27am
Example of a trading plan llew Trading Systems 2 Jun 19, 2004 11:23am

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)