ignal Trading Education Center ~ Trade like Pro: Weekly Trading Ecucation Article Pagina | di3 Trade like a Pro Weekly Trading Education Article The Best Defense (camara By Mark Piling vat In both the sports and military world, the saying is; “The best defense iso strong offense." in the trading worl, {think i should be changed to, "The best defense Is «strong business plan.” That ‘sage advice in ANY market environment but doubly so In the volatila, gaprinfested trading waters of recent weeks \ieualy all ofthe actin n the markets in recent times has been due tothe changing picture on the war for. “Fomake t even more confusing, what pases for good news (othe merken one Gy is taken tobe bearsh 2 fev days lotr and vies versa. Then, acing inst to injury, the market wil decide to change directions at a ‘ant that doesnt realy make sence atthe time. Traders lng to make serse of the nls have vary ite tego ‘on with normal chart studies and tecnica! levels seemingly ignore bythe marke. And, forget about the ‘ondamertast One lok a the cent rections t the damal economic reports makes pertecty Gear tat the markets inoring this data right now. {yout feeling confused and more than a Ite beaten up over the past fen weeks, you arent alone 'm ‘receiving several amall massages per €ay from trader looking fora viable way to prespern the current market environment shared one of those messages (alongwith my advice) Ina recent etic. Simply pu, we need to {void chasing every Ile move n the markt uniess there Is 6 setup that fis within ou own inaldual Business pia. ‘One part of my own business plan mandates tat Ido nat EVER trade on a day with a large gap move. As you ‘i know fom the econ inthe broad market recently, that means that I hate een tracing very tie. 1 kaon ftom yours cf exparianca tat 1 cant predict hom the market wil sigest tht sep, ond, by virtue fs existence, ‘that gap makes risk management much more dit. 1 ke to take the time in thie artce to feeus on another reader emall message that thnk is dosaly connected toa toni I revnty wrote about The sue raised central to trading suet, both In this feu ensronment ‘dn the fture when the market retrns to Wading on pertinent fundamertal and technlal data, “The reader writes, “Have you wilten anything about a strategy fr traders where they could keep most oftheir “renings with giving them back tothe marke? Ifyou ave wren anytiing on that subec, please lt me Know, have not yet learned hat at | tink { must lara t sell t9 soon ve seen too many bear pros ‘alec over'2 months vanich in Lek and turn tlre. IF you have an wisdom on the subject about harvesting profes (when to sel, ow much prof o sim a, et.) wil you pase pass on tora?" Now tse ae VERY important question. Those of you who have ge through the work of bung 2 trading pian (ane actualy trading tet plan) krow tat these are all questions that MUST be answered in the ‘evelopment ofthat plan. You see, n addition te defining what types of races you wil place, the plan should ‘0 spect whats your aceptabe risk /eemaré rato. won't take a ade tat does offer me at east a 1:2 “ato, te reason that & lows me te target a goin o¢ $8 while assuming # ek of mo roe Bary §2.50. 177 go {it over and over and even half my trades are ses, I should stil reap art gan overtime 1 dont know I this reader nas bul his own business plan. I not then it seems these questions are being asked inthe process of bulldng tat plan, If he has aready bul the plo, thee i aking te guestions in an atemDe {a improve onthe rests that busines pln is providing. Thats alse goo thing. We must always evaluate {he resus we achieve in trading and determine frst whether we are adherag to cu business plan and, “scondly, whether woUld be posebleto improve the busines plan without introducing atonal risk tothe secoune ‘Nom, this is very important point! Meiying the business plan and how we are gong to trade the accounts hto:www-esiznal com/educationikeprolarchivel0804/080604.2s> 10-09-2008