What is your criteria for a solid plan for your investments?

Beginner Questions
1

Good Morning Guys

I know for a fact that a good trader must have a good, solid plan for every trade before they execute them. I think. :slight_smile:

My question is: how exactly do you judge a good and solid plan? Do you follow a set criteria? Do you follow a set of questionnaires for specific market situations?

E.g. How/when to enter? How/when to exit?

What’s your opinion?

Thank You

2

One word - Research

Start from the ground and work your way up. Find a rough idea that you know works on the market, this does not have to be profitable, but it need’s to fit the markets price action.

You need to be able to quantify each and every decision that you intend to make with this rough trade plan, by this I mean all the variables involved in the trade. Then you can list each of the favorable and unfavorable trades and see what they have in common - this is done by looking at the variables which are identical for each trade. These chosen variables are your filters which can be used to improve the profitability of this rough trade plan into a more specific ‘custom criteria’.

It makes sense that the more variables you record for each trade, the greater the scope of your analysis that can be performed when you have enough data. But the variables chosen must be the same for each and every trade, this makes it efficient and consistent.

Now you have a solid set of results, the more results you obtain the greater the degree of confidence which you can have in knowing that you have a sound trade plan. Even though this approach is very time consuming, and requires some thought before even looking at the charts; you will know that you have covered all the elements required.

3

You are right bro. We need a solid plan. But how we make this solid plan? We need to learn Forex trade thoroughly. This is the only way that would help you to make a solid plan.

4

@Jezzode

Wow. Thanks for the contribution. I never thought to get this good of a reply to my question. It really helped me. :slight_smile:

My question now, though; can you give an example of a ‘rough idea’ and a ‘variable’? Or could you just give a simplified real life situation based on your experience with that ‘rough idea’ and a ‘variable’? So I could study them with greater focus and specificity.

I’m sorry if I’m asking too much. I just don’t anything yet and your contribution helped me a lot. Thanks. :slight_smile:

@johnson7

Thanks for the contribution. :slight_smile:

5

Did you check out the school’s lesson on the subject? School of Pipsology Developing Your Own Trading Plan :wink:

6

Hey Mate, answer also hide in your question, solid plan for every trade. In generally, i note down each activity and make solid plan, I know it’s taking time but it’s also return me good results. Before go to market, check update news and statement then make plan and execute them.

7

@Sweet Pip

Yeah, I’m getting there. :slight_smile:
Thanks for the contribution.

@Haley12

Thanks for the contribution. Can you give an example of a simple statement and its given prediction? Thank you.

8

Whatever you come up with, you need to be aware that your profit is made when you enter the market and not when you exit the market. You need to define your strategy before you enter the trade and then stick with it no matter what. That takes a lot of discipline and experience, but in the end it is worth it in my opinion.

9

@TheLastBear

“Your profit is made when you enter the market and not when you exit”. Wow. That’s a really good quote. Thanks for that.
But, can you give an example of a definite strategy? Even if it’s simple, I’d really appreciate it. Thanks for the contribution.

10

I tend to play a defence game for investments…

I would ask myself how much would I lose in the worst case…then I would check how much is the lowest possible gains …If I can accept both…then it should be a go…

11

That is not a simple request as it depends 100% on the individual trader and their preferences, goals, time horizon etc. There is a few things I can recommend which you may or may not use as pointers.

  1. You can put in the hard work and define a strategy which will work for you. This will take time and patience, but in my opinion the best way to move forward. Open a live micro-account, fund it with $100 and only trade 0.01 lots until you are able to record weekly profits on a consistent base.

  2. In case you do not have as much time you would have the option of PAMM investments. There are plenty of brokers who offer PAMM accounts and you may want to look into them and see if they would offer your something beneficial for your trading goals. Just be careful if you do decide to go down this route.

  3. A lesser way of PAMM investments is social trading, copy trading or mirror trading (they are all the same). It has been hyped up and basically some brokers offer you the option to copy traders which you pick. You can set your parameters and are on cruise control. I would be careful with who you follow, you can usually check their stats and some explain their strategy.

  4. You can also follow your brokers recommendations and that can be tricky depending on the broker you use. There are so many bucket shops who want you to over-leverage until you blow up your account and I would stay far away from them. Then there are a few outlets who actually care about their traders and want them to make money as most brokers earn their living from spreads which means the more and longer you trade successfully with them the more they will earn.

Personally, I have a combination of my own trading (which is my preferred choice) and this year I decided to operate a second account where I follow my brokers recommendations after I followed their trades on paper for about four months and liked the results. I have about 70% of my capital in my own trading strategy and 30% follows my brokers recommendations around.

Take your time and find something that works for you. Hope this helps.