[Advice needed] Plan for the first 6 month for a beginner

[Benjamin Tang 4]

Hi BBT Fam,

I have watched the 5 classes, the DAS resources videos, most advanced videos and setup DAS Trader.  My question is how should my day trading path looks like for lets say the coming 6 months?

I was thinking the following:

 

Month 1 - $50 Risk - Simulator (Still need to determine Buying power, start capital etc)

# Trades per day	4 (but not more than 10)
Target Accuracy	50% min, 60-70% goal
Max Risk Per Trade	$50 per trade
Daily Profit Target	$100 p/d
Daily Max Loss	If i lose $100 in 1 day i'm done for the day!
Weekly Goal	Daily goal x 3 = $300/week

 

Objectives & Rules

1. Trade in the simulator for a min of 1 month to gain experience with new strategies

2. Only trade during the times permitted by your strategy

3. Do not exceed Max Loss, or Max Position Size restrictions

4. Exceed a min of 50% accuracy. 60-70% is target range

5. Maintain a positive profit loss ratio of AT LEAST 1:1

6. Use scaling strategy to sell ½ when you are up a little, and set stop at break even

7. Do not trade through major economic news (FOMC meeting minutes)

8. When i trade LIVE, only trade the strategies i successfully traded as a paper trader
    

If i can achieve these objectives and follow these rules, i will be ready to advance to live trading in month 2

 

Month 2 - $50 Risk Live Account

i can only do this step when i completed Month 1.
 

Repeat month 1 except this time i will be trading in a real account

# Trades per day	4 (but not more than 10)
Target Accuracy	50% min, 60-70% goal
Max Risk Per Trade	$50 per trade
Daily Profit Target	$100 p/d
Daily Max Loss	If i lose $100 in 1 day i'm done for the day!
Weekly Goal	Daily goal x 3 = $300/week

 

 

Month 3 - $100 Risk Live Account

i can only do this step when i complete Month 2. Only increase size if you are generating profits
 

# Trades per day	4 (but not more than 10)
Target Accuracy	50% min, 60-70% goal
Max Risk Per Trade	$100 per trade
Daily Profit Target	$200 p/d
Daily Max Loss	If i lose $200 in 1 day i'm are done for the day!
Weekly Goal	Daily goal x 3  (approx $600/week or $30k/year)

 

Month 4 - $200 Risk Live Account

i can only do this step when i complete Month 3. Only increase size if i'm generating profits
 

# Trades per day	4 (but not more than 10)
Target Accuracy	50% min, 60-70% goal
Max Risk Per Trade	$200 per trade
Daily Profit Target	$400 p/d
Daily Max Loss	If i lose $400 in 1 day i'm done for the day!
Weekly Goal	Daily goal x 3  (approx $1200/week or $62k/year)

 

 

Month 5 - $400 Risk Live Account

i can only do this step when i complete Month 4. Only increase size if i'm are generating profits
 

# Trades per day	4 (but not more than 10)
Target Accuracy	50% min, 60-70% goal
Max Risk Per Trade	$400 per trade
Daily Profit Target	$800 p/d
Daily Max Loss	If i lose $800 in 1 day i'm done for the day!
Weekly Goal	Daily goal x 3  (approx $2400/week or $120k/year)

Month 6 - Continue on!

 

 

Looking forward to hear your feedback

 

Kind regards

Benjamin

[Romell Roberts 7]

It took me about 6 weeks to start regularly pulling in 40 - 60$ per day, in the beginning I was losing 150 - 600$ per day due to hotkey mistakes and a complete lack of experience (all paper trading of course). I plan on paper trading for 6 months.

My suggestion as a fellow newbie is to give yourself 1 free month where you're just getting comfortable with everything, then start the plan in month 2, good luck 

 

[Benjamin Tang 4]

4 hours ago, Romell Roberts said:

It took me about 6 weeks to start regularly pulling in 40 - 60$ per day, in the beginning I was losing 150 - 600$ per day due to hotkey mistakes and a complete lack of experience (all paper trading of course). I plan on paper trading for 6 months.

My suggestion as a fellow newbie is to give yourself 1 free month where you're just getting comfortable with everything, then start the plan in month 2, good luck 

 

That is a great advice. thank you for sharing

[jonosg 11]

If it were me I wouldn't be putting time limits on when  to go live, especially if you haven't developed your strategies and tested them yet. I did a few moths of reading and watching - 1 month getting stuff together and getting used to placing orders tweaking hotkeys / layouts etc.  4 months in sim (taking a few very small position live trade 2 or 3 per week in the last month) through another account. Then went 'live' at $10 risk per trade - but I'm not in a rush to go live big time. Probably going to stick with small size for a while.

Sim is OK but it is not the same as trading live so once you do have some muscle memory in the entry and exit process and  confidence in your strategies from Sim etc it's definitely worth trading live with a very small size. I have a $50K account I went with $10 risk per trade $100max per day as the rule (which I did break a couple of times at the start). Can you afford to take take say 20 losing trades at the start? Or are you absolutely certain that you will honor your stops, not double down etc. before you've ever traded live? AT $10 risk an account blow up FUBAR is theoretically still possible but highly unlikely, you can only really start your psychological training with real money; It only takes you to  ignore your stop and an average down you don't get away  once and very quickly it can become a $1000+  loss at $50 per trade risk.

Target accuracy, profit targets, Risk to reward etc is somewhat strategy and very psychology dependent - you have a 50% target accuracy a $50 Risk per trade and a rule that limits you to $100 max loss - this doesn't seem realistic to me - pure Random chance is going to have you stop trading for the day way too regular for my liking, 2 losing trades and your done. If you only want to risk $100 per day - definitely look at dropping your risk per trade at the start. 

Also setting daily and weekly profit targets before you've even started in Sim risks setting you out trading your P&L from the outset - this is a pretty bad habit. It's fine to have an idea what you're looking for but I would wait until you've got your strategies in place before setting any of that as rules do this as part of your journal during sim. Profit targets not only require you being able to spot the set ups and entries and execute them but you need to do the same for the exits - that's a tall order for 1 month in Sim in my opinion.

Peter Donnelly and Mike B have some excellent success webinars on trading plans and education development - It would be worth checking them out and reality checking what you've put together - but what you have is pretty good first pass.

 

Edited May 31, 2020 by jonosg

[Benjamin Tang 4]

31 minutes ago, jonosg said:

If it were me I wouldn't be putting time limits on when  to go live, especially if you haven't developed your strategies and tested them yet. I did a few moths of reading and watching - 1 month getting stuff together and getting used to placing orders tweaking hotkeys / layouts etc.  4 months in sim (taking a few very small position live trade 2 or 3 per week in the last month) through another account. Then went 'live' at $10 risk per trade - but I'm not in a rush to go live big time. Probably going to stick with small size for a while.

Sim is OK but it is not the same as trading live so once you do have some muscle memory in the entry and exit process and  confidence in your strategies from Sim etc it's definitely worth trading live with a very small size. I have a $50K account I went with $10 risk per trade $100max per day as the rule (which I did break a couple of times at the start). Can you afford to take take say 20 losing trades at the start? Or are you absolutely certain that you will honor your stops, not double down etc. before you've ever traded live? AT $10 risk an account blow up FUBAR is theoretically still possible but highly unlikely, you can only really start your psychological training with real money; It only takes you to  ignore your stop and an average down you don't get away  once and very quickly it can become a $1000+  loss at $50 per trade risk.

Target accuracy, profit targets, Risk to reward etc is somewhat strategy and very psychology dependent - you have a 50% target accuracy a $50 Risk per trade and a rule that limits you to $100 max loss - this doesn't seem realistic to me - pure Random chance is going to have you stop trading for the day way too regular for my liking, 2 losing trades and your done. If you only want to risk $100 per day - definitely look at dropping your risk per trade at the start. 

Also setting daily and weekly profit targets before you've even started in Sim risks setting you out trading your P&L from the outset - this is a pretty bad habit. It's fine to have an idea what you're looking for but I would wait until you've got your strategies in place before setting any of that as rules do this as part of your journal during sim. Profit targets not only require you being able to spot the set ups and entries and execute them but you need to do the same for the exits - that's a tall order for 1 month in Sim in my opinion.

Peter Donnelly and Mike B have some excellent success webinars on trading plans and education development - It would be worth checking them out and reality checking what you've put together - but what you have is pretty good first pass.

 

Thank you for these awesome feedback. Im going to work on it and definitely doing paper trading for at least a couple of month.

[jonosg 11]

1 hour ago, Benjamin Tang said:

Thank you for these awesome feedback. Im going to work on it and definitely doing paper trading for at least a couple of month.

Your welcome -

BTW you need a Risk:Reward of 1:1.5 or preferably 1:2 to make any money at a 50% Win rate - keep that in mind when you're in the sim and developing your strategies - I would advise upping your R:R.

Edited May 31, 2020 by jonosg

[Brandon 2]

Trading with a live account is very different from sim. The emotions in live are amplified significantly and the psychological aspect of trading will come into play in a way that it never does in sim. My advice would be to not put a limit on your time in sim. Stay paper trading till your 100% comfortable with your hot key set up and you have your set ups and strategies down packed. Once your transition to live, dont focus on your P/L just focus on executing great trades and following your rules. 

 

When i started, I traded in sim for about 2 months before going live. When I went live i had 3 red days back to back, I couldnt follow my rules and I kept taking heavy losses on crappy trading. I decided to go back to sim, perfect my strategies( I only really trade 2-3 set ups), study trading psychology and perfecting my hot keys  before going back to live again. This was a huge learning experience and has allowed me to be more consistent in my trading.

 

I hope this helps.

Edited June 1, 2020 by Brandon

[Abiel 475]

This is a good start. Make sure to define very precise rules while you are experimenting in sim:

• Entry rules (getting good prices)
• Position-sizing rules (limiting risk per position)
• Exit rules (setting clear profit targets and stop-loss levels)

As you become familiar with price action and your indicators, you will develop some very fine distinctions like getting out on a candle that goes violently against you or never get in a trade with a big spread candle without corresponding volume, etc. 

Be aware that while in sim you will develop habits, good and bad, depending on how disciplined you are with your rules. If you average down / up and get good results (somehow in sim often we are very lucky) you will build a belief that this is fine and you will get away with it, only to be punished in your live trading.  Habits, good and bad, take time to form, and also take time to change.