hi guys (and girls)
I recently tried to attach my tradingplan.doc to my previous thread but i guess i’m not a member for too long. So can someone post it for me? so the community can control it for me. it would be a huge help because i want to start testing it but not quite sure guys.
thanks a lot
just copy/paste it as text in this thread
2016
FOREX
YAHYA DOUDOUH
[B][TRADING PLAN][/B]
If you’re failing to plan, you’re inevitably planning to fail.
[B]Contents
PERSONAL INFORMATION 2
Why do you want to be a trader? 2
What kind of trader are you? 2
What are your strengths & weaknesses? 2
What is your mindset during trades? 3
What are your revenue expectations? 3
What are your goals? 3
How and why are you going to reach those goals? 4
What is your reward for reaching these goals? 4
Define your Goals (Yearly, Monthly, Weekly, Daily) 4
What markets do you trade and why? 4
What pairs and how many will you trade? 4
What time of the day are you going to trade? 5
Why that time? 5
What timeframes will you use and why? 5
Which broker(s) do you use? 6
Which platform do you use? 6
PRE-MARKET ROUTINE 6
RISK MANAGEMENT 6
What is your risk % per trade and all trades combined? 6
What is your Risk-Reward Ratio? 6
How much % of portfolio you use per trade? 6
When do you decide to stop the trading for that day and do you do? 6
BACK & FORWARD TESTING RESULTS 6
ENTRY & EXIT RULES 7
How do you enter a long trade? 7
Do you use a market or limit order? 7
Where goes your stop loss? 7
Where goes your target goal? 7
How do you enter a short trade? 7
Do you use a market or limit order? 7
Where goes your stop loss? 7
Where goes your target goal? 7
How do you exit a winning trade? 7
How do you exit a losing trade? 7
STRATEGY 7
What kind of strategies do you use? 7
Describe your whole setup for long entries? 7
Describe your whole setup for short entries? 7
POST-MARKET ROUTINE 7
[/B]
[B]PERSONAL INFORMATION[/B]
[B]Why do you want to be a trader?[/B]
Because my biggest desire is to be financial free. Not needing to work for a boss or a company that leaves me vulnerable because they can fire you instantly and be in financial problems. Let’s say even if they never fire me, it still means I’m stuck working for someone else. Making him/her rich while they are paying me, just so I can make ends meet. Living paycheck to paycheck is something that I just cannot accept a life like that. There is more in life than waking up spending the majority of your day to work in a job for a company you don’t own. Just so you can repeat that for years and years. As a reward you get 20 days off that miserable life. So my biggest desire is to be financially independent.
[B]What kind of trader are you?[/B]
I think personally that a person’s characteristics are reflected into his trading results. So an impatient person shall be an impatient trader who doesn’t have the ability to wait for the perfect setup for entry or exit. So if my knowledge about myself is good enough I know that I’ll have to work on my emotions. Being happy will be dangerous for me because then I tend to throw with money. On the other hand if I’m sad or down I will have a bad attitude. I will tend to get back to the market and out of experience having revenge feeling on the market can never ever be profitable. So right know I am still dependent on my feeling but that shall change. Also I do think that I am a swing-trader because I feel comfortable to hold a position from a few hours to a few days maximum. Intraday goes a little bit too fast for me and a position trader is way to slow because you should hold that for over a week.
[B]What are your strengths & weaknesses?[/B]
STRENGTHS: I think personally that I have a great advantage to be raised multi-cultural so I have acquired an open minded vision from my early age. Also have I struggled a lot to fit In so I have been objective in my day to day activities. That gives me the opportunity to just use that habit into the markets. Also am I very self-taught in many things. So there is not much difference for me to teach myself the art of trading. If you remain objective to the market and educate yourself. That gives you a few miles ahead of the rest. Also my father taught me to be disciplined in anything. So that means being disciplined, objective and open minded are great strengths for a trading career.
My current work gives me the opportunity to have a lot of free time to educate myself during before and after my work. So basically I’m getting paid to educate myself.
WEAKNESSES: My biggest weakness is that I am very emotional. So If I feel fed up or happy it will be clearly visible in my trading results, so I have to work on that part. It’s one weakness but a big one.
[B]What is your mindset during trades?[/B]
My mindset shall always be calm and clear myself from any form of stress. Also shall I never trade if I am suffering from any kind of temporary physical limitations. Also will I never trade if I’m experiencing any kind of time pressure or any kind of social pressure. And obviously I shall always use the rules defined in my trading plan.
[B]What are your revenue expectations?[/B]
Because I still lack a sufficient amount of experience this values may still be adjusted or changed. But in big lines I am aiming for a ROI 100% per year before taxes.
Start capital: €5.000
Return on Investment:
YEAR 100% MONTH 8.34% WEEK 2.083% DAY 0.42%
YEAR MONTH WEEK DAY
1 10.000 417 104,25 21
2 20.000 834 208,5 42
3 40.000 1.668 417 84
4 80.000 3.336 834 168
5 160.000 6.672 1.668 336
6 320.000 13.344 3.336 672
7 640.000 26.688 6.672 1344
[B]What are your goals?[/B]
My biggest goals are to be a full time trader who has financial freedom and doesn’t have to work for a boss. To give back to my family by taking care of them and giving them all the luxury they deserve. Giving all the time they deserve and be able to nurture my kids the best way possible and not be absent all the time due to my work. So as a full time trader working from home is my dream.
[B]How and why are you going to reach those goals?[/B]
By being very determined and patient. Working each and every day towards these goals. Educating myself on every aspect of this subject I will focus on the journey and not on the final destination. Because focusing each and every day on the small steps will eventually become one big achievement. So my tactic is to simply do each and every day something towards my goal. Even if I don’t feel like it, I will try to just read a few pages of a book or watch some videos around a Forex subject. Also I know that I’m not alone in this journey because my wife really supports me in achieving and reaching my goals. Even when I see that it bothers her that I put so much time into my education she still remains supportive. It goes even beyond that, because she know how important it is for me. She tries to engage with me through my education by asking questions and giving me advice.
[B]What is your reward for reaching these goals?[/B]
I think that the reward is the goal itself so I don’t really need to be rewarded because the goal is so pleasant and relaxing. That I don’t need it. So we can say that my reward is really freedom and the amount of money that I will make on a consistent basis. But I shall reward myself from time to time with sport cars, traveling the world and fancy clothes.
[B]Define your Goals (Yearly, Monthly, Weekly, Daily)[/B]
DAILY: Being able to always do or learn something about the market no matter how little or small.
WEEKLY: Every week learning either a new tactic or new method about the Forex world.
MONTHLY: Reading each and every month a new book. Doesn’t matter if it is a small or big one.
YEARLY: Adapting my whole trading plan to the always changing market.
[B]What markets do you trade and why?[/B]
I will only trade the FOREX market for the first 5 years. Because there isn’t such a thing as multitasking. I really need to focus on only 1 market to understand every single aspect of it. As for after 5 years I will start looking into other markets to see which one is the most interesting for me.
[B]What pairs and how many will you trade?[/B]
I will start with only one pair because like I mentioned before multitasking I not effective. The EUR/USD shall be the pair I will focus on for the first year. If things go well I will consider taking a second pair. I choose the EUR/USD because I live in de EU and the dollar is the biggest competitor for the euro. And it is a pair with highest volatility.
[B]What time of the day are you going to trade?[/B]
Opening hours Forex sessions:
EU 8H – 17H
ASIA 1H – 11H
USA 14H – 23H
AUD 23H – 7H
During the overlap of the EU and the USA session.
[B]Why that time?[/B]
The smartest choice for the euro dollar would be to trade between 14h and 17h because in those 3 hours you have a high volatility. Both markets are open then and you have a doubled volume. But since only 3 hours is way too short for a trading day I am going to trade between 12h and 17h.
[B]What timeframes will you use and why?[/B]
Because I am a swing trader I feel most comfortable with those timeframes.
DAILY: To identify a bearish or bullish trend.
4 HOURLY: To let the indicators work their magic.
HOURLY: To place my entry & exit order.
[B]Which broker(s) do you use?[/B]
[B]Which platform do you use?[/B]
[B]RISK MANAGEMENT[/B]
[B]What is your risk % per trade and all trades combined?[/B]
I will never risk more than 1% of my portfolio per trade. And all open trades combined shall never risk more than 5% of my portfolio.
[B]What is your Risk-Reward Ratio?[/B]
This is not a static number. It can change slightly due to market conditions. Because my R/R is based on support & resistance levels. But in big lines I will focus on a R/R between 1:2 and 1:3.
[B]How much % of portfolio you use per trade?[/B]
I shall always use 1/5 of my whole portfolio to ensure that I remain a sufficient amount of free margin. And when I endure a large drawdown I can still survive and get back on my feet.
[B]When do you decide to stop the trading for that day and what do you do?[/B]
When I get stopped 2 times on a row I shall quit the day and review my trading day and search where my mistakes are hidden and weather my trading plan is still up to date. I won’t put another order before I have found the problem and done the back testing or forward testing.
[B]STRATEGY[/B]
[B]What kind of strategy do you use?[/B]
My strategy is very simple and complex at the same time. I will only use technical analysis based on price action to trade the market swings in the previous noted timeframes.
The first step will be to search for a solid trend. When that is done I will look at the RSI to determine whether the market is oversold or bought. Then i will start to search for a potential reversal or breakout that i can trade. Once i found that we will start looking at the swings/ retracements in the trend. When that’s all done it is time to start identifying the support & resistance lines in the trend. And decide which ones were holding and are important. After that selection I’m going to look which of those S/R lines are overlapping with the FIB levels. If the RSI is positive, the S/R lines are holding on the same levels as the Fibonacci percentages. Then we have a solid setup to enter the market.
[B]What indicators will you use?[/B]
I won’t use more than 2 indicators combined with support & resistance levels just because I’m not in the mood of getting analysis paralysis. So keeping it simple is the plan. The RSI indicators will determine if the market is overbought or oversold so a good entry point can be searched. Fibonacci shall be the key indicator to know at which levels to look and to help determine which support or resistance levels are valuable. And then eventually the support & resistance will be telling us where our stops and targets will go. If we know that then we should get a pretty good look on our R/R.
[B]RSI[/B]
First rule I will always change the values of the RSI to 72-28 just to be sure that it’s really over-sold & bought. Second rule the RSI indicator will only be used on the daily time frame to avoid potential fake spikes. Third rule IF the RSI shows a positive conformation THEN we still need positive conformation from the FIB & S/R to have a valid setup.
[B]FIBONACCI[/B]
Fibonacci is an important indicator that I will combine with different other things. First of all I will use Fibonacci on the 4H chart as well on the hourly chart so I can define my entries & exits. First I search a good swing high and swing low point. And I will always use the candle’s wig as reference point. First I will use a retracement tool to see all the Fibonacci levels and look which levels are strong holding. When we get a solid oversold or bought on the same time with a solid FIB line and when we look left we find also that at the same level the S/R levels where holding. We can assume it’s a solid setup. Then I will take the extension tool to look where there might be a good target level to look for. The target shall go somewhere where there was a previous resistance.
[B]SUPPORT & RESISTANCE[/B]
The S/R levels will be useful to help the Fibonacci tool give more credibility. After the Fibonacci found a solid setup we will put our stop loss just below our entry point on the previous structure high for a long trade or above our entry for a short trade. As for the target we will look for a Fibonacci level that equals with a previous resistance level for a long trade or a support level for a short trade.
[B]EXIT RULES[/B]
[B]How do you exit a winning trade?[/B]
I shall always use a stop loss order. The moment I tend to reach my target I will close half my order and for the other half I shall remove the target and move my stop to breakeven. I will personally keep tabs on the market. If the market is still going in my favor I will put a trailing stop of approx. 50 pips.
[B]How do you exit a losing trade?[/B]
I will always put a stop loss order on the previous structure high or previous resistance. I will never ever move my stop. Also will I never ever re-enter the market if I get stopped. Revenge trading is never allowed. First all conditions need to be met to have a solid setup.
[B]PRE-MARKET ROUTINE[/B]
STEP 1: I will check that all the trades of the previous trading day are logged in my journal and analyzed weather they were executed by my trading rules.
STEP 2: Check all the open trades (if there are any). Adjust the targets and stop losses if necessary.
STEP 3: Plan your trading day hour per hour in your journal.
[B]POST-MARKET ROUTINE[/B]
STEP 1: Record all trades of the current day.
STEP 2: Check if all trades were done by your trading plan.
(What is your punishment if you deviate from your plan)
STEP 3: Routine after a winning/losing trading day
[B]BACK & FORWARD TESTING RESULTS[/B]
Check the Excel file for back testing results & Demo account results.
thanks man it worked perfectly
i reallllyyy like the details of your plan, especially the reasoning, the reasons onto why how where and your motivations.
you have realy put some nice amount of work to figure this all out.
in my eyes youre perfectly set and very well on the way to start. if you manage to stick to this:
What is your mindset during trades?
My mindset shall always be calm and clear myself from any form of stress. Also shall I never trade if I am suffering from any kind of temporary physical limitations. Also will I never trade if I’m experiencing any kind of time pressure or any kind of social pressure. And obviously I shall always use the rules defined in my trading plan.How and why are you going to reach those goals?
By being very determined and patient. Working each and every day towards these goals. Educating myself on every aspect of this subject I will focus on the journey and not on the final destination. Because focusing each and every day on the small steps will eventually become one big achievement. So my tactic is to simply do each and every day something towards my goal. Even if I don’t feel like it, I will try to just read a few pages of a book or watch some videos around a Forex subject. Also I know that I’m not alone in this journey because my wife really supports me in achieving and reaching my goals. Even when I see that it bothers her that I put so much time into my education she still remains supportive. It goes even beyond that, because she know how important it is for me. She tries to engage with me through my education by asking questions and giving me advice.
then you should have anice time learning. trading is more self control and your own psychology than indicators price action or news/fundamentals.
about your indicators you want to use i will not comment since i dont use any indicators. but i must point out strongly, while i can understand RSI and others you mentioned, i would stongly rfecomend you to reevaluate if you really want to use Fibbonacci.
about your trading habbits of what you do before while after trade and if youre a swing trader or scalper or whatever: nobody can or should try to tell you that, you must figure that out on your own (that comes back to the previous point of psychology and selfcontrol). and frankly do not let anybody tell you what is best, as there is no best for everyone, best is what fits [B]you[/B] the best.
YEAR 100% MONTH 8.34% WEEK 2.083% DAY 0.42%
YEAR MONTH WEEK DAY
1 10.000 417 104,25 21
2 20.000 834 208,5 42
3 40.000 1.668 417 84
4 80.000 3.336 834 168
5 160.000 6.672 1.668 336
6 320.000 13.344 3.336 672
7 640.000 26.688 6.672 1344
The numbers up here sound very nice but do not get fed up if you can not stick to that plan and have the ammounts you planned to have in year 1, 2, and etc. your goal is a rather high one, which is achivable, but not as easy as it sounds.
if something crosses my mind ill write again, but till then; good luck.
thanks a lot TURBONero this helps a lot and i shall indeed look into the Fibonacci because i stil don’t master the skill of Fibonacci trading
my hint about fibbonacci was: that its rather useless and only a distraction that doesnt work in real trading. so me mentioning fibbonacci specifically was meant as that you should reevaluate if you really want to use it at all or throw it out of your trading plan since i think its a big waist of time with the inevitable result of abandoning any fibbo tactics/strategies. but thats my own opinion, maybe you can find use for it and have success with it.
Like i said this is juste FASE 1 creating a rough first look and i was searching a bit of a review from a few people. I hope that there will be a few other who share there thoughts with me about my plan so i can go over to FASE 2 back testing and demo testing the plan and make any additional changes if necessary so i can go over to FASE 3 live trading
Hi JayJay95,
I agree with Turbonero that your thought process is good and the fact that you are taking the time to work on a trading plan instead of jumping head first with your eyes closed is a great sign.
I don’t know how ‘new’ you are or what your experience is so i will only base my reply on what you have written in the plan.
Firstly, in terms of your goals…
Is it realistic for a new trader to make 100% in their first year using sound money management? Is it realistic for a new trader to make any profit at all Year 1? On what are you basing your assumptions?
If you make 2% the first month are you failing? How will the feeling that you are behind schedule play with your emotions? You see what i’m getting at.
In terms of strategy, reversals are the hardest trades to make, it’s the one that new traders commonly blow accounts on and there is a reason for this, that reason is not hard to find out by the way 
So, should the least experienced trader start off with the most difficult trades?
If as you mentioned educating yourself in trading is a priority, what is it you want to learn about and why?
What book are you going to buy for which subject? On what date will you buy that book? How many hours will you study per week, on what days and at what times? Does you wife agree with this? If not is there a compromise?
What is your pre-trading routine designed to do? What factors effect it? Is it working? How do you measure that? How do you know what to change?
Your honesty is great you say you are disciplined but emotional, how has emotion affected your trading so far? How do you plan to address this? How much psychology have you read in the past
If you are going to trade the overlap you will need to study the overlap, How often is the NY session an extension of the London session? At what times do pullbacks often occur? Which are the critical times of note within that session for your strategy?
Initially as turbonero mentioned, give yourself time to learn without any unnecessary pressure.
Make a plan for the next 3 months for example, plan what your days will look like, prep routines,study, testing, demo trading etc and play around with things until they fit. Write down your observations. As questions or problems arise in any area, and they will no matter how prepared you are, look for solutions and a way of measuring and comparing what you are doing/seeing, put them in your plan.
You have made a decent start. Now you need to get specific and allow yourself the time to learn the processes and what is right for you so that you can begin to practice and progress.
MAN pfieeeuuww that’s a big piece of usefull information !! thanks a lot man i really really appriciate it ! all right so i guess i know what to do for the upcoming months and like you said i need to dig deeper into a few subject and starting one at a time. can you take a look at those books acctually last week i was putting an order for those books but for some reason i waited so i guess i can go and ask your toughts about those books.
LIST:
The Ultimate Trading Guide by : John R. Hill George Pruitt
Trade Your Way to Financial Freedom by Van K. Tharp
Trading for a Living by Dr Alexander Elder
A Complete Guide to Technical Trading Tactics by John L. Person
And for motivation:
RICH DAD POOR DAD (reading for the second time)
RICHEST MAN IN BABYLON
THINK GROW RICH by napoleon hill
thanks a lot for the advice
Hi Jayjay
I would like to recommend the following tweak in your plan
If you trade as what you have decribe. You most probably won’t have enough lifespan to find out what’s wrong with your strategy and gain nirvana in forex trading.
Any question?
what you discribe if clear as water but i’ve 2 main questions. then i change from swing trader to daytrader. That’s not really a problem but still that’s not what i intended to do. and secondly i’m doubting the credibility because i see you’re a newbie at babypips so i really don’t know what your trading history and experience is. But i have my doubts if you have allready tested this combination or not you feel me?
That observation is to some extent going to be true of all forum “information”, regardless of anyone’s membership-duration or post-count, though.
I don’t think it’s any more, or less, true of Alpha than it is of anyone else here (including myself, doubtless).
For the record, although one-minute bars would be too fast-moving for me, I do think Alpha makes a good point and is basically right in what he says, here. The time-frames you’re looking at are going to make your learning-curve negotiation terribly slow, and its educational/practice benefits could be significantly speeded up by doing the same thing on a faster time-scale.
Here’s the reality about using faster time-frames: the “signals” become less reliable, it’s true, as the time-frame reduces, but the number of trading opportunities significantly increases. We all have to decide for yourselves whether or not the balance between the two makes speeding up worthwhile. For what it’s worth, I offer you the observation that less reliable signals can still be more profitable, overall, than more reliable ones, if their trading-frequency is significantly higher (and I do trade on that basis myself, and have done so for many years).
I’ll offer a few general observations about your trading plan, too, but I want to start off by saying that I think [I]it’s a hugely useful and helpful thing to have produced, and that you’ve done it very well[/I].[B][U] I really want to stress that, at the outset[/U][/B], because otherwise I know my comments below might come across as criticism, and I think you deserve congratulation than criticism! 
Please note that the following “general observations” are personal perspective only, and that I wouldn’t expect all experienced traders to agree with all of them …
(i) I think “daily targets” don’t mean very much and aren’t worthwhile; I think “monthly average targets” are probably all you should be thinking about
(ii) I think you’re being very ambitious aiming at 100% profit in a year (it’s what the top trading-floor traders at places like Goldman Sachs expect to make on their accounts over a year - and they have two math degrees, hundreds of hours of highly specialised trading education, thousands of hours of screen-time experience and a risk manager standing over their shoulders) - nothing wrong with a bit of ambition, though!
(iii) I think you should be very careful indeed about over-conceptualizing "overbought"and “oversold” and be aware of the difference between the speed of a car and its acceleration: a fast car can accelerate more and more and more [I]slowly[/I] between 100 and 200 m.p.h, while its speed continues to [I]rise[/I], and for very long periods of time its acceleration can fall (it can be increasingly overbought) while its speed (the prices) continues inexorably to rise
(iv) I think that allowing your combined open trades to represent as much as 5% of your account (given the direct and indirect correlations between forex pairs) is terribly dangerous, and [I]far[/I] too high; it might make sense if you were trading a mixture of forex, indices, stocks, options and so on, but I think you need a re-think, as a spot forex trader, about risk-management, here: black swans are getting both more frequent and darker in colour, in the forex markets
(v) I agree with Turbo’s comments about Fibonacci and express them more strongly, myself - after studying it for quite a long time, I never found any more than anecdotal, cherry-picked evidence that it has any more value than randomly drawn lines (and am aware of some independent, academic studies which report exactly the same), and can see no sensible probabilistic/statistical/mathematical reasons why it would - for me, it’s about as rational as a horoscope (and plenty of people base their trades on those, too!
(vi) I think it’s very important, [B]before[/B] trading with real money, to [I][U]know[/U][/I] (from backtesting and forward-testing on a demo account) that your systems has a proven statistical edge over the market
(vii) I think your idea about automated trailing stops is basically a mistaken one (I’ve said more here)
I hope I didn’t sound too critical, and have been helpful. Again, well done in principle for producing your plan.
I sense that you have zero confidence in me.
I have been trading for 5 years and 7months. Please don’t look down on me. I hope to be a full time trader one day.
My advice is to completely drop Fibs from your trading. They’re make believe just like a horoscope. You’ll never find them being used by anyone who knows what they’re doing.
I’d suggest you stick with the timeframes you’ve chosen, don’t go to lower timeframes as they increase trading cost.
Also, don’t take any advice from someone who immediately gets argumental just because you ask a question about their skills… I’ll leave the interpretation open for you there
Don’t go to lower timeframe is rubbish. You need big timeframe to determine the trend, smaller time frame for precise entry. Alternatively, if you can’t enter a precise position due to work schedule, measure the average High Low range(1hr,4hr,daily or even weekly) and drawdown, set stop or buy stop to hedge when wrong.
That may be true. :47:
thanks for the advice!! i shall look into it
Thanks a lot for the evidence but i just questioned it because i questione everyone and everything but thanks anyways i love getting feedback
Everyone is different. Ultimately, you have to develop your own trading methodology to be successful. I come to the conclusion that it’s almost impossible to imitate others trading strategy. No matter how hard you try. Everyone’s temperament, work schedule , family commitment is so very much different. The same strategy becomes so skewed in a different person’s hands. You need to come up with something that suit your own risk appetite and life schedule. I edited the post. Just in case you never see this portion.