sticking to your trading plan

[duyle27]

I want to share with you a simple insight that I just gained as a trader. It is actually one of the fundamental concepts that every professional trader lives by. It is the concept of following your trading plan. Building a solid trading plan is the most important part of being a trader. New traders commonly fail because 1) they trade outside of their trading plan, or 2) their trading planned is flawed. I noticed that one of my biggest leaks was making random plays outside of my trading plan.

If you are acting on impulse and trading untested strategies, it is highly probably that your going to lose. Even if your play has positive expected value, it has to have enough EV to outweigh the transaction costs. Think of this way, when you make an impulsive play you are basically making the statement that your untested strategy is profitable enough to beat the transaction costs. Trading is about finding re-occurring patterns where you can extract a profit. If it is a profitable strategy, the situation will re-occur. So, take it slow and build on the information that you gained.

 

[kwickwool]

Agree with all the above if you are inexperienced, and maybe sticking to a rigid system to start is similar to riding a bike at the start with stabilisers, but ultimately u need to take them off and ultimately u need to move away from a totally rigid system.

A lot of screen time over a long time to get into the zone of price action and movement to trade dynamically "in the moment" which cannot be ultimately summed up in a simple system of EA's and different indicators etc, thats the ultimate of a trader?

Instead of using a system waiting on a specific set up with your indicators why not try and work out what your indicators are telling you at any given moment? Trying to find this "holy grail of systems" is where i think ultimately traders fail, instead of understanding and watching price movement.

 

[malaguti]

I want to share with you a simple insight that I just gained as a trader. It is actually one of the fundamental concepts that every professional trader lives by. It is the concept of following your trading plan. Building a solid trading plan is the most important part of being a trader. New traders commonly fail because 1) they trade outside of their trading plan, or 2) their trading planned is flawed. I noticed that one of my biggest leaks was making random plays outside of my trading plan.

If you are acting on impulse and trading untested strategies, it is highly probably that your going to lose. Even if your play has positive expected value, it has to have enough EV to outweigh the transaction costs. Think of this way, when you make an impulsive play you are basically making the statement that your untested strategy is profitable enough to beat the transaction costs. Trading is about finding re-occurring patterns where you can extract a profit. If it is a profitable strategy, the situation will re-occur. So, take it slow and build on the information that you gained.

concur with all the above. Having that system also helps the psychological aspect of drawdowns and successive losing trades. Knowing that I might have a losing trade 1 in every 3 for example and that 2 in a row might be as much as I will encounter makes it that much easier pulling the trigger every single time.