Lesson 8.2-Piranha-Profits-Trading-Plan.pdf

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Piranha Profits By Adam Khoo™

My Trading Business Plan

I, _______________________ am committed to strictly follow my trading plan.

The following clearly defines my trading routine, so that every day I only look for trades based on this

routine. Each trade outcome should be considered purely as a certain R-Multiple, and is a small sample of

the larger statistical process of accumulating R-Multiples over time. On a microscopic level (i.e. on a trade-

by-trade level), each outcome is uncertain and random. However, on a macroscopic level (i.e. after doing

many trades based on a consistent routine that gives an edge), the aggregate outcome of many R-

Multiples should be positive.

The goal is to define a plan consisting of unambiguous entry, exit and risk control criteria. This plan gives

an edge because of the following:

Entry rules are sufficiently stringent to stay away from a lot of market noise and choppy behavior,

and sufficiently capture price movements incidentally without emphasis on predictions.

Exit rules are defined to allow wins to more than cover losses in the long run, so that the win rate is

no longer the emphasis.

The position-sizing method ensures that the risk per trade is a fixed percentage of the existing

account balance, allowing the accumulation of R-Multiples to compound the account.

The edge provided by any trading plan must be preserved through psychologically conditioning

ourselves to the necessary ups and downs that must happen in the trading process. Undue

concerns about short-term fluctuations tend to diminish or eliminate the edge that the plan is

supposed to give, because subtle shifts in our trading behavior lead to deviations from the plan.

1) Which strategies will I trade? (e.g Bounce, Impulse Pullback, Capitulation etc…)

2) How many hours a day will I spend to find trade setups? What will be my research

timings (e.g. 8.00pm- 9.30pm)

3) Entry Rules

Entry rules strategy 1:

Entry rules strategy 2:

Entry rules strategy 3:

4) Exit Rules

a. Fixed target Price (e.g. 2.5R)?

b. Raising stop loss to below bearish candles (for long) above bullish candles (for shorts)

c. Other exit rules? (i.e. before earnings announcements)

5) Position-sizing and Risks

a. Risk per trade (e.g. 1%-3%) This should be kept consistent throughout all trades

b. Number of open positions at risk allowed at any one time?