Trading System Development 2017

PART 1: Self-Assessment

1. How much time in a day do you have devote to trading?
>2 hours at night

2. When you are trading, how many distractions do you expect to have?
>none

3. How much time do you expect to devote to developing your trading system, to doing your personal psychological work, and to working on your business plan for trading?
>Developing system - every weekend
Personal psychology - everyday
Business Plan - monthly

4. What are your computer skills? What skills do you need before you begin this trading venture?
>Excel Spreadsheet

5. What do you know about statistics? What you need to know in statistics?
>Multivariate statistics. Market Hypothesis testing.

6. How would you rate your market knowledge?
>Medium in Chart reading
>Poor in Risk Management

7. What are your psychological strengths and weaknesses in terms of personal discipline?
>Might not follow stop loss signal.
Too anxious and impatient when there is no entry or exit signals for consecutive few days.

8. Do you tend to get compulsive (caught up in the excitement of trading)? Or do you have emotional issues that constantly crop up, such as fear or anger?
>Yes & Impatience.

9. What do you need to learn, accomplish or solve prior to beginning trading? How will you do that?
>I need to learn to discipline myself so that I do not get impatience and enter/exit unnecessarily. Also need to have a trading system, risk management system, recording and evaluation systems being mapped out.


PART 2 : Defining Objectives

1. What is your advantage or edge in trading? What is the particular concept that you are trading that gives you an advantage?
>Reversals

2. How much money can you afford to lose? How much risk can you afford to take on each trade?
>$10k in total. Risk of 2% per trade (as per industry standard).

3. How much money do you need to make each year? Do you need to live off that money?
> Min. 30%. No.

4. Do you understand that you may have long losing streaks continuously (eg. 10 losses in a row)?
>Yes

5. Do you have the time to trade short term?
>Yes.

6. How much social contact do you need?
>None

7. Can you work by yourselves day after day? How much do other people influence you?
>Yes. None.

8. How much do you expect to make each year as a percentage of your trading capital?
> Min 30% of trading capital

9. What risk level are you willing to tolerate in order to achieve that?
>Max 10% of trading capital

10. How will you know your system is working/not working? What do you expect from your system in various type of markets (trending/Sideways/High Volatile/Low Volatile)?
>Conduct system test run once per quarter.
> My current system (Reversals) - Sideways market/ volatility??


PART 3 : Trading Ideas

1. What kind of market do you want to trade? Is it appropriate to specialise?
> Need to specialise.
Type of market I want to trade :
- Volatile Sideways ???
- Involatile Trending ???
- Reversal
- High Liquidity

2. Do you want any conditions to setup before you enter the market? What are they?
> Check psychology - No distraction
> Chart - Trendlines, Support/Resistance, VSA, Candlesticks,Indicators
> Risk Management
>Exit strategy

3. How important do you think entry is?
>Very important (even though Van K Tharp thinks it's not important)

4. What is your stop loss plan? If you have been stopped out, how are you going to enter the market again?
> Initial stop loss - At support
> Trailing stop loss - At support of second entry
> Exit stop loss - reversals (candlestick & indicators)

5. How do you plan to take profits?
>Possible methods :
Reversal stops
Trailing stops
Technical stops ???
Price objectives

6. What is your plan in terms of position sizing?
> Pyramid