Trading IS A Business

…fail to plan…plan to fail

Shane Dalyshaned@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

Entry, Exit, Risk, Risk %, total exposure, markets (pairs)

Swing? Day? Both?

How do you know what to fix? Monitor performance?

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)

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.

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?

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 %)

Enemy Still LurksYOU

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.

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

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.