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Trading IS A Business …fail to plan…plan to fail

Trading IS A Business …fail to plan…plan to fail. Shane Daly shaned@netpicks.com. Fail To Plan. Not a sexy topic…is the key to success Jumping right in advice, system….Proof (backtest, forward)? Trading by gut feel, “guru”, follow the crowd

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Trading IS A Business …fail to plan…plan to fail

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  1. Trading IS A Business…fail to plan…plan to fail Shane Dalyshaned@netpicks.com

  2. Fail To Plan • Not a sexy topic…is the key to success • Jumping right in advice, system….Proof (backtest, forward)? • Trading by gut feel, “guru”, follow the crowd • Entry, Exit, Risk, Risk %, total exposure, markets (pairs) • Swing? Day? Both? • How do you know what to fix? Monitor performance?

  3. Where To Start? • Understand the basics of your system (comfortable) • Choose markets, timeframes, times to trade • Decide on rules for exit, entry, adjusts, trade mgmt. • Backtest (100). Record. Hard right edge. Bar by bar. • Use unrelated historical data. • Everything entered into spreadsheet (heavy lifting done for you)

  4. How’d You Do? • Results should include @ minimum win %, profit factor (how much per winning compared to losers), avg win/loss, trade type results, max win/loss • Chance to evaluate strength and weakness of system/plan • Spreadsheet input starting balance to work out risk % and capital needed (largest loss for conservative) • Positive expectancy? Move to forward testing (paper, demo) • Positive expectancy? Get the plan in stone.

  5. Plan Takes Shape • Built a solid foundation • When to enter. When to exit. Amount. Full exposure % • Confidence during drawdown. Confidence during losing streak. • Ignore outside influence. Ignore untested variables. Road to self-sufficient trader. • Emotions can sit on the sidelines. Rule based trading. • Is this all?

  6. Move Towards Goal • Why are you a trader? Financial freedom (Tharp) • Daily goals (simple as POQ, trade review) • Weekly goals (sticking to plan, daily reviews) • Monthly goals (X increase in account, mistake free trading) • Plan shows ballpark expectation • Capitalize to reach financial goals (risk %)

  7. Enemy Still Lurks YOU • Daily check in. Fit to trade? Shut ‘er down. • Breaking your own rules. Has to be a consequence. • Greed/Fear • Follow you trade plan. Your strategy. Your business plan • Your plan will make the process easier. Avoid the monster.

  8. Moving Forward • When to withdraw profits • Broker criteria • When to increase position size • Trade off swing/day • Extreme circumstance (power, internet) • Start of trade day • Severe drawdown

  9. Further Ahead • Plan puts you ahead of majority • No guarantee of success • Minimize the effect of losers • If/Then • Puts a damper on hope, fear and greed.

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