Q: Trading plan?

[munchiedude]

Hi all,

This is my first post on this forum although i have been reading with interest all the advice and comments from members who are no doubt far more experienced than me!

I may be repeating another topic but i do have some questions relating to trading plans and the appropriate methods to begin planning and back testing one.

firstly, my situation is that i am in financial services and have to some extent a working background knowledge to the markets however trading knowledge is fairly limited at this stage. i'm looking at taking trading extremely seriously as a business operating outside of my normal 8-5. I've reached the point where i have read many beginners post, got sharescope at home on dual 24 inch monitors with tradefair account and also meta trader 4 shortly for demo-ing on.

and now my questions - i have read many a post regarding trading plans, back testing to see if it works and applying it on the demo/live.

what is the methodology to creating a trading plan? how or where do you start and what do you normally look for? once a trading plan has been established, what is the process by which to backtest the hypothesis? i'm a little confused over formulating a hypothesis and the approach to identifying a trading strategy which works for me

my generaly strategy is do trade forex on a daytrading basis (evenings mainly, 6pm-10pm) and possibly swing trade equities. Is anyone able to make suitable currency pairs/instruments to trade in the evening?

sorry for the long post, i'm here hoping that maybe one of the many experienced members here can help a beginner find his way!

 

[timsk]

Hi munchie,
Welcome to T2W.
Check out links 2 & 3 in my signature - they should go quite some way towards answering your question. Also, check out the FAQs forum - this might be a good starting point: http://www.trade2win.com/boards/trading-faq/30626-there-strategy-system-i-should-use-where-can-i-find.html
Enjoy!
Tim.

 

[coopster]

Hi Munchiedude,

I too am fairly new but a little further along than you i think. I try to trade US stocks in the evenings.

There are trading plan templates that i have found on the net that might get you started. Our very own timsk above has one to get you started. Do a search for it here or even google.

I found all of the "getting going" stuff very time consuming and annoying but it is something you have to go through. No one can give you all you need in one handy package because no one else is you.

As for a strategy, try looking up people like James16 and Clockwork on Forex Factory. Or our very own Trader Dante on this site. The setups are simple but effective and for a backtesting quite easy to spot. From there you may find your own thing but that will get you going.

Be aware that trading like a business in the evenings is very hard work if you are intending to day-trade. I have a desk job and trying to find the motivation to trade after already staring at a monitor for 8+ hours at work is very hard.

Also, keep in mind that trading should not be used as an escape from the day job. I found i was making rubbish trades just for the fun of it as it made the day more exciting than it otherwise would be. That is not the way to go and is just gambling.

Once i found a system/setup that i could get my teeth into (see Mr Charts thread) it all started falling into place and the motivation is still there after several months of practising. The best step i made was to start documenting my trades, even if they were terrible. I recommend this to you as it would have saved me months of time making the same mistakes over and over. It is also harder to lie to yourself if it is on paper in front of you.

I am by no means an expert and forex is not my thing. Sharescope is good for UK stocks but won't help you much for live evening trading. Metatrader is what lots of members here swear by so you did the right thing there.

Keep going but don't rush anything is my advice. No quitting the day job for a few years!

 

[munchiedude]

hi coopster, and thank you very much for your detailed insight into your trading experiences. if you are on msn, it would be useful to exchange contacts to maybe exchange ideas regarding the markets since we both trade in the evenings. please PM me if this is feasible.

as to where i am at present, i have established a trading plan from a template on T2W, but am constantly modifying it as i learn more about myself and the strategies to trade.

i have a 3 monitor setup, and have 4 instances of MT4 set up with different indicators according to different markets (1 range, 1 trend, 1 back test and 1 live) i like to run it all concurrently as i found that having the live trading MT4 in the middle screen allows me to watch 'clean' price action to determine nothing but point of entry and exit with less emphasis on what indicators are doing.

so, since then, ive been demo trading with hantec markets with a view, if consistent, to move onto live trading when demo shows consistency. my day job is a stockbroker, so it kinda helps staring at screens at work as i am near enough tuned into the market 24/7! lol

the record taking that you suggest is an useful and interesting point, whilst i have been documenting things, what are the parameters that you document? when you mention "mistakes" what kind of mistakes could be made in trading forex? sorry if this seems a silly question but i guess for a newbie like me, you only know its a mistake if you know what went wrong and in order to know that, you would have to know what is the right way, i dont have enough experience in this to know what is technically right?

looking forward to yuor insights..!