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In this new blog series I will go step-by-step through the process by which I used post trade analysis of a group of my trades to help me create a rules based trading plan. My trading plan development has been guided by my study of on-demand courses offered by Wyckoff Analytics in the areas of trading plan, back-testing and process. I highly recommend them as a roadmap for creating a systematic approach to engaging with the markets. You can find them here https://www.wyckoffanalytics.com/
First a few definitions:
What is a trading plan?
A trading plan is unique to each individual trader/investor. In the broadest terms it is the process by which a trader/investor engages with markets to achieve specific goals. There are many different markets and probably as many ways to play them as there are individual human beings. It is really important to find the right match and I have settled on what resonates with me. I have a longer-term time horizon. I am trying to find growth stocks capable of producing outsized gains in one of my plans; and trading precious metals ETF’s in the other. This blog will initially focus on my growth stock plan. By using Wyckoffian principles and prudent money management my goal is to stay with growing companies for the most dynamic portion of their growth to generate consistently attractive returns for my portfolio.
What is post trade analysis?
Post trade analysis involves reviewing a completed trade to see what went right and what went wrong, and using the information gathered to improve my trading. It can lead to creating new rules, or doing a better job of sticking to rules already in place.
There are three main components of my trading plan:
Market Context definition
Watch List creation and maintenance
I have organized my rules by category. The categories are: Selection, Pre-trade Analysis, Entry, Risk Management, Stops and Exit. Future posts will discuss my rules development in that sequence.
Trade with (not against) institutions!