Hi Fellow traders/Newbies.
You would have heard nearly everyone tell you “you’ve got to build a plan” or “Don’t trade without a strategy”. What I wanted to do is start a topic that gets right into the meat of a successful trading plan/strategy.
Question:
How can I follow a strategy or make a plan, if I don’t know it works?
Answer:
You can’t unless you’ve back tested it or forward tested it in the real markets for a minimum of 100 trade’s.
This is the catch 22 part of trading that gets everyone during the learning phase. [B]Psychology[/B] plays a massive part of sticking to your plan even if you know its profitable.
Question:
How do I know if my plan (or someone else’s strategy) is profitable?
Answer:
Only you can find that out. A clear set of rules helps & it must make sense to you. Again a minimum of 100 trades is needed to see if the strategy has an edge.
My point is you need an [B]edge[/B] in the markets before following a plan. To find an [B]edge[/B] take’s hard work & discipline. Then you need to test that [B]edge[/B] in different market conditions over many hundreds of trades to see if it really is the [B]edge[/B] your looking for. If it proves to build profits over time then you will build confidence in your[B] edge[/B]. Confidence leads to better discipline & trust in your plan. Before you know it you have a successful trading plan & on your way to becoming a successful trader.
Now I personally am not a full time trader. I’m know guru either. I have a full time job & trade using daily/weekly & monthly time frames. I just know that I have become profitable through hard work in finding an edge to exploit the markets. I shall continue to find new edges & will use the edges to diversify my portfolio to keep a smooth increase in my equity.
What this has enabled me to do is plough money (my savings) into a live trading account & build it up with a realistic profit between 5% to 100% per year. If your can make more, then tell me how & maybe I too can add this to my portfolio as well (not going to hold my breath). All I can say is I wish someone told me this from the beginning, so this is why I am sharing what I deem as extremely important information when it comes to trading profitably. I now have the confidence to add money each month to my account knowing I have 100% belief in my plan. I am saving & trading for the future. This has taken me over 5 Years to reach this stage of trading. Why so long? We’ll that’s a whole different topic.
Please feel free to contribute & help each other build or test a strategy/plan with an edge & a 100% belief in trading that edge.
[B]KISS[/B] - KEEP IT SIMPLE STUPID is a start.
All other goals will fall into place naturally.
This video says it all - Mark Douglas - MIND OVER MARKET (Full length Interview) - YouTube
[B]Now go find your edge[/B] 