In this section, the Ichimoku trading plan will be created. Once this trading plan has been created, it will be backtested in the next section to see whether it is historically successful. It is understood that past results do not always reflect future results. However, if the backtest results are successful, there is a high probability that future results may be successful as well.
The trading plan we use for our trading is listed later. I have created a simple trading plan; however, you can change anything in your trading plan. Everyone is different and has a different style of trading. Therefore, the trading plan should fit your style of trading. If you do not know your style, you need to paper-trade various trading plans until you can determine your trading style. Do not trade until you know your strengths and weaknesses when it comes to trading.
Also, do not trade without having a trading plan written down. Would you start a business without a business plan? You have to think and act like it is a business in order to succeed. If not, you will fail.
Here is our trading plan:
We only trade currencies. We never trade more than four currencies at one time because it is hard to manage more than four currencies at one time.
We never allocate more than 20 percent of my funds at one time.
Margin is not used.
No Add-ons, which means that once a trade is entered, more positions cannot be added.
Only instruments that show a positive backtest result can ...