Q&A: Why Can’t I use someone else’s Trading Plan?

by David Jenyns on July 17, 2011

Question by Sydney Nelson: Why Can’t I use someone else’s Trading Plan?
Why can’t I use someone else’s trading or investing plan if it’s working for them?

Best answer:

Answer by Ota Philadelphia
Although most Trading Plans have common features and share some universal rules, a Trading Plan is unique for each individual trader. Your plan must reflect your own:

goals
capital
time availability
risk tolerance
personality!

These factors will dictate your trading style and approach to the markets.

A simple example of that would be a choice between intraday momentum trading and swing trading. There may be some rules in common, but generally speaking, a swing trader would not be able to follow the rules in a momentum trader’s plan. Different trading styles have their own sets of rules, which also vary from one trader to the next. The rules for entry into a trade and trade management, for example, are highly individual and are dictated by your personal psychology and ability to stay disciplined.

One of my trading mentors likes to reiterate that you only trade your beliefs in the market. This inevitably leads to a conclusion that your trading plan is a reflection of your personal beliefs, however influenced by your mentors you may be.

I would love to be able to take Sam Seiden’s trading plan and make it my own, but I am firmly convinced that people are much more likely to follow their own rules as set in their own plan than follow someone else’s. Creating your own plan makes one a more disciplined trader. Those of us who trade cannot underestimate the value of discipline in trading. Happy trading everyone!

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