Share Market Toolbox
Investing / Trading
Having an investing/trading plan is very
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Do I really need a plan, or a strategy?
Without going into the gory detail, it is very important
some sort of
By having a plan and strategy clearly documented, you are able to perform some testing on past information to gain a feel for how successful the intended strategy might be. It also means that when certain conditions arise, your actions are already described in the plan, and there will be no need to stop and dither and procrastinate about "should I do this? or shouldn't I do it?". The strategy ought to contain some risk analysis that describes what you will do when a certain high-risk condition occurs. Then a lot of the emotion is removed from the resulting actions.
This is explained in Robert's free eBook (PDF) Article ST-2400, "Trading Styles, Plans and Strategies" (freely available to Toolbox non-Members).
What is the difference between a plan and a strategy?
The industry professionals don't have a universally agreed standard definition, but the following simple definitions seem to be in broad acceptance:
So, the plan describes the sort of investing or trading you are thinking of doing,
By considering these aspects you will clear some smog
from your thoughts, and
For more information on this topic, see Robert's eBook (PDF) Articles here in the Share Market Toolbox, some of which are restricted - for subscribing Toolbox Members.
Strategy concepts and ideas
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are not recommendations or endorsements of any product, method, strategy, etc.
For financial advice, a professional and licensed financial advisor should be engaged.