Mechanical Trading System
Professionals trade a plan; novices improvise and pay for it. The questions a trading plan has to answer before you risk real money in the market.
Have you ever wondered what separates professional traders from novices? Professionals have a plan, and they trade according to it. With novices, it is hard to say how they trade, because their approach is not objective or systematic enough to document. One thing is certain: they lose a lot of money.
So what is the trading plan professionals use? It may be hard to believe, but there are many different plans for becoming successful at trading. What matters is having a plan you can follow, one that is practical and fits your lifestyle. Whether it is trend following, momentum scalping, arbitrage, or a technical or fundamental approach, the plan has to suit you. A major reason trading systems look good in a computer backtest but perform poorly in real time is that the trader lacks the discipline of a computer to execute the same plan consistently, day in and day out.
To succeed at trading, a trader has to operate like a machine when executing trades. If you are willing to work with that level of discipline, the next step is to write a solid set of rules. Those rules should answer every question that can arise while trading.
The questions your trading plan must answer
- When to buy and sell?
- What to buy and sell?
- Which market to trade?
- What quantity to trade?
- How much capital should be in the trading account?
- When to roll over an F&O position?
These questions can be answered in different ways, but make sure your plan answers all of them in some way before you deploy it for live trading. If you would rather not build a plan from scratch, we present TrendShikari NTS for your consideration.
