Thoughts on my trading plan?

Trading Discussion
1

I am putting together a trading plan and am looking for feedback on it and my strategy. Please see below!

Quizzkidd’s Trading Plan

Goal:

My goal is to be able to achieve 10% growth on my account each month.

I want to be able to become a day trader because it will give me the freedom to pursue my dream of financial freedom and security. Becoming a day trader is the next step, which is to secure several streams of income at once.

I plan to first become profitable, with two months worth of data to show that I can be consistent. Afterward, I will trade via FTMO funded account ($100k). If I am consistently trading at 10% profit each month, I should be able to stop working traditionally.

Eventually, I would be trading with FTMO on 3 separate 100k accounts, in addition to building my personal capital.

Market:

My target markets will be AUDNZD, EURJPY, XAUUSDm, and EURUSD. I will be open to trading on other currencies, but will focus on these for.

My focus will be setting day trades during the London/NY overlap sessions , and also to scalp during Asia sessions. I will be trading from 2am - 6am (Asia) and 9am - 1pm (NY).

Research and Fundamentals:

Each trade I make, I will have drawn up my charts and reviewed economic dates as well as researched any news for that specific pair. I will complete a form which will serve as a journal entry for my trade so that I can review after the trade has closed. I will also need to record my thoughts on why I felt like this was a valid trade and will need to record the time and date of my trade along with a snip for review after the trade is closed.

Charts:

For scalping, I will review price action on 15 min charts, find set ups on 5 min charts, and managed the trade on 1m charts.

For day trading, I will review price action on 4h charts, setups on 1h charts, and manage trades on 15 min charts.

Strategy:

For both day trading and scalping, I will be using the following strategy (subject to change based on account performance):

I will be trading using the MA Crossover (10EMA,50MA) as an indicator, coupled with RSI 15, and MACD w/ Histogram. There will need to be 3 separate signals for me to enter the trade.

First, I will identify if the market is trending or ranging.

Next, I will look for potential MA crosses. IF there is a crossover, the next step will be to confirm RSI overbought/oversold condition (curve should have crossed back over from the 70/30 line to enter trade). IF the RSI signal is met, verify crossover on MACD with histogram reversal for final confirmation.

THIS STRATEGY WILL BE BACKTESTED FIRST AND THEN TRADED ON DEMO FOR A MINIMUM OF 2 MONTHS BEFORE GOING LIVE. IF THE ACCOUNT DOES NOT GROW 10% PER MONTH ON AVERAGE IN EITHER SCENARIO, THE TRADING STRATEGY WILL NEED TO BE REVIEWED AND TWEAKED FOR SUCCESS.

Rules:

- Never move stop loss to give the trade more room. You've set your risk and you should stick to it. 
- Never open an open-ended trade.
- Risk is set at no more than 2% of account balance per trade.
- Reward should be no less than 2x risk.
- Get out of trade ahead of economic data release.
- Do not trade until you have completed your morning routine.
- Do not stray from a trade, if a trade is open, you should be monitoring it. 
- If you lose  5% in a day, stop trading for the day. 
- Always record and review trades.
1 Like
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Mate if you do this you will be leagues ahead of most retail traders after a year. I have no idea if your strategies are any good but if you backtest them you will find out. The most important thing is having set rules, sticking to them, reviewing how you performed against those rules, collecting data and adjusting accordingly.
Well done in actually setting out a plan - now

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Thanks, I’m still not sure about the strategy. It’s something I thought up, but after some feedback on another forum as well as re-reading my strategy, I feel like I need to revisit it.

The other part, though, I feel is pretty solid, so I’m going to stick with that. I’ve been working in retail management for the longest time, so all of this is similar to creating an action plan for your business.

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Why is someone funded 100k newbie?
Its sound fishy to me,

Have u read all term and disclosure?

5

The company he is talking about provides funding to anyone on the condition that you pay a fee and undergo a certain ‘challenge’ over a period of time to ensure you can manage risk and have a profitable edge, if you are successful then they will give you a funded account to trade and you get a profit split which I believe is like 80/20 in your favour. You still have maximum daily loss limits and drawdown limits etc.
FTMO are the main ones but there are other companies that offer similar things for people that can prove they can trade but do not have the upfront capital. I have never used them but I do know people that have.

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Test your strategy before changing it. Everyone will have 1000 opinions on what it should be but you are the one who it has to suit. Don’t get too caught up jumping around between strategies looking for the next best thing. That is where I struggled at the beginning - wish I had just stuck to one thing and made it work.

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Personally I’d lose the 10% profit target per month. It will unconsciously influence your trading.

If your month starts poorly you’ll start trying to push things.

In trading we take want the market gives us, trading plans shouldn’t be like setting sales targets.

With that said I believe 10% isn’t hard, infact if you stick to your plan you can do much more.

But your trading plan should revolve around perfect trade execution - not profit targets.

If all your trades were traded correctly (even if you have a losing month) you have made progress.

And if you can trade perfectly every trade the success is assured.

Set up some processes to monitor your trading. Grade yourself on execution.

And don’t beat yourself up if things don’t go to plan. Positive well being is one of the precursors for self discipline.

Good luck

3 Likes
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Definitely agree. I think your measure of progress/success should be whether you executed your plan flawlessly rather than an arbitrary percentage figure.

9

Fair input from everyone. I can definitely understand the need to avoid setting a goal for the month. I guess to feel the most safe, I need to just make sure I have enough funds to pay my avg expenses for at least a year’s worth before I leave the traditional workplace. That way if I have some trading valleys, I can still pay my bills lol. At the same time, I feel like 10% avg monthly increase is a goal to aspire to, since i’d be counting on this account to support me. Just gotta learn some serious patience for the bad times.

Either way, I’ll backtest the strategy first on tradingview, and then I’ll decide whether I think it’s even going to work for me.

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VERY advanced, good luck!!

1 Like
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This is great thank you for sharing. Actually, I am going to back test this strategy. Hope it work as you say

12

Hi Oskar,

I never said the strategy works. I haven’t back tested it yet! buyer beware!

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according to me, in spite of having too much plan the result of trading can be useless if you dont have regular practice,

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Where did you find this strategy? On first glance, I dont think youre going to get many signals on a 10 and 50 ema and a slow rsi. The chances that the slow rsi becomes oversold in a short uptrend is rare. On top of that by the time the macd sets up you may have missed the move. Am I right? Have you tested it? You may catch moves on 2 long term emas but I dont think using a fast and slow.

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Wow,
How could i didnt know of this?

Has any member pass the verification?

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Not sure mate? When you’re a fisherman you know what the weather is doing I guess :sweat_smile:

Yes I know people that have passed and trade their money. I obviously wouldn’t ever recommend it to anyone as everyone’s circumstances and trading ability is different. If it’s something that interests you there is plenty of info out there to research.

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I didn’t find it. I thought of it myself. Which is why I haven’t committed to it. The part I’m most concerned with is the trading plan. Just want to make sure it seems like I have a clear plan.

Also, I did a little backtesting on this strategy, I am going to have to review what I want to do. Right now, I am backtesting the London Breakout Strategy. Then, I’ll go back and review the strategy I had on my trading plan.

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Hi,
This is a great post and you have some excellent reviews from others on here. I can attest to the advice that others have suggested. I am back with Forex (and trading in general) after a five year gap, and am in a similar situation to yourself. I am a contract project manager by trade, so like you I find it quite easy to envisage a plan, to make a plan and to stick to a plan. You can’t be a good contract project manager unless you do. On the one hand, for future Forex, I am not investing any funds until I have done exactly as you are suggesting. On the other hand, in parallel to my renewed interest in Forex, I have two other “hobbies” in a similar vein. The first is Crypto-currency investment (expect long term to mean 2 to 5 years holding), and the second is a revisit to horse racing. On those two, I have already committed funds, but of a size that will not impact our standard of living in the slightest. I’ll leave the Crypto for another post at a later time, but on the subject of the horse racing I back tested about 1,100 historical results and ran those results through a Monte Carlo simulation that showed me that if I use a 1/2% of bank as stake for each trade, I have a 99% probability of NOT breaking the bank (which I defined as a 90% drawdown) with even stakes, and a likely outcome of 200% profit after 1,100 trades or 12 months activity. So I started with even stakes and 1/2% of bank per stake with up to 8 trades per day, and after 30 days of trading, the account was up 20% after 105 trades in 30 days My trading plan stated that if I reached a 25% gain on bank, I would double the stakes to 1% per trade, which I have done for the past 50 trades and the account is now back down to break even.
I have committed these hard rules as a trial to test my own psychology to ensure that once I do back testing, Monte Carlo analysis and convince myself that I have an edge, I will apply the same strategy and plan to what I consider to be a more complex but potentially unlimited pursuit of Forex trading. The reason I have done this is because when I back tested my results from five years ago, here were some lessons learned:
1 I started off with a written plan to follow just one method, but managed somehow to balloon that out to six different methods. Backtesting ONLY the first method I chose, I had not lost any money over 250 trades. I did not know that until I had done data analysis on actual trades.
2 During the first 80 trades, I made a trade journal log of some potential areas for improvement, but did not change the parameters of my trades because I had already convinced myself that there is a big edge there based on back tested results. I am not extremely naive. My father was a horse follower, and I am damn sure he had an edge. But he was unwilling to explain to me how he chose from racing form. I guess for him, it was one thing he was really good at, and didn’t see any point in passing that on to anyone else. I was able to identify my mistakes where I deviated from my plan. And was also able to accurately quantify the cost of those mistakes. In the first 30 day period, the mistakes had cost about 30% of the realized profits, or put another way, the account would have been up by 30% had it not been for the mistakes of deviating from the plan.
3 Having just finished reading Trading in the Zone, which I bought six years ago, and can’t for the life of me remember reading back then, I now have a very clear way forward in terms of establishing the use of signals, quantifying them in the trading plan so there is absolutely no margin of error for “interpreting” the rules, and setting about back testing then trading. Mark Douglas recommends at least 20 trades or trade cycles of the same plan without wavering at all from the quantified plan rules, before deciding whether any tweaking is in order.

In summary, I think you have chosen wisely. The only thing I would do differently myself would be to dispense with the scalping because others advise this is far harder to win consistently than with swing trading or day trading. And my own experience of trying to follow six methods at the same time meant that I could not concentrate on ANY of them with clarity to know which are winning and which are losing, despite keeping them in separate “bank pots”. I would also try to ensure that your signals for knowing you are “in the zone” may occur too infrequently, so how long is it going to take to trade 20 trades before tweaking the plan, and therefore not knowing which tweak, if any meant turning profit into loss. In my particular trial case of horse racing I am seeking 11R on winners, so I will need to trade far more than 20 trades - in fact, it is about 1,600 trades to achieve a 99.8% (two sigma) probability that the results demonstrate an edge instead of just luck, and I need to be able to handle a losing streak of about 48 trades without a winner.

Best of luck with your plan.

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good t be honest and also thorough