A capitalist needs a trading plan to know when and how to act in the capital markets. A trading plan needs to be thoroughly designed to fit the capitalist's personality, psychology and risk affinity. If it does not match, the capitalist will be unable to follow the trading plan.
For a span of two years, I studied topics like economics, finance, trading and psychology as well as actively participating in both a bull and a bear market. During these two years, I gained insights in what kind of trading fits my personality and is profitable for me personally.
A trading plan is composed of two components. A trading method which describes the general style of trading and a trading system which describes the detailed rules for when and how to enter and exit a trade.
My trading method
- OMXS30 stock index trader
I only trade the domestic Swedish OMXS30 large cap stock index.
- Long only trader
I only trade based on the speculation that prices will be higher in the future.
- Trend following trader
I only react to price movements, I want to be invested in a objectively proven favorable trend until the trend is objectively proven to be over.
- Position trader
I aim to be invested during big bull trends that can last for month or even years.
My trading system
- Market entry
If price is above MA50, in order to not risk too much capital in an unknowable future, I gradually scale into a fully invested position. If a positive trend does not develop, I terminate my entry before losing more than 0,5 % of my capital.
- Market exit
I make a complete exit when the price has decreased below the trailing Chandelier exit price level.