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Daily Break from Consolidation Trading Plan
A trading plan acts as a guide to how you are going to interact with the markets. In this bonus, an example of how a trading plan can be written is provided. It gives a working example of a trading plan as was discussed on page 121 in Section 9.3 “Your Trading Plan” of Dating the Stock Market. From the information presented in this trading plan, a trader should be able to devise a way to enter the market which will give them an edge and write their own plan around this edge.
12+ Reasons Why Backtesting Cannot Work and
Why You Need to do it
Backtesting is used to quantify how good your edge is. Backtesting reviews historical data and uses the written software code to buy and sell stocks according to your trading plan. It is a quick way to differentiate between a good and a poor system. Once you understand that your edge is valid, you can start to trade it with a small amount of capital. As you go forward, you can compare your results to how the computer would play the same set up and see how well you are handling live trading. This presentation outlines many of the issues with backtesting yet still recommends doing it.
Benefits and Disadvantages of Weekly Trading Strategies
Whether you work full time during the trading day, find yourself too busy during the day or don’t have the patience to watch the computer screen you may find trading using weekly charts just what you are looking for. Weekly charts provide a way to trade on a longer-term timescale and still carry on your day-to-day business. When I trade using weekly charts, I typically do the analysis on the weekend and enter my trades using bracket orders on Monday morning. Monitoring and adjusting my trades typically take between 0 to 30 minutes per day.
The Holy Grail of Trading Systems Does Not Exist