A Strategy Implementation Plan

Lance Beggs May 11, 2012 at 11114 am

Do not jump straight into live trading!

Success with any trading strategy should follow a graduated

implementation plan, to allow you to increase risk ONLY as you have
proven sufficient knowledge and skill at each risk level.

YTC PAT Vol 5 discusses deliberate practice and provides a detailed

example of a graduated learning plan. YTC Scalper offers a similar
(but much summarised) version, which I will share with you here as
an example.

Consider implementing a similar plan for your own trading, adapting

of course for your preferred market, timeframe, strategy, risk
tolerance and financial situation.

1. Post-Session Learning

Implement a 20-session period of chart review.

If you happen to have access to historical data that can provide 1-

range price bars, then you can fast-track this stage. If not, youʼll
need to do it in real-time.

For 20 sessions of chart data, review the price charts at any of the
following times:

Euro – One hour following the UK session open

Euro – One hour following any UK/EUR news reports (High or
Medium Impact)
Euro – One hour following the US session open
 Euro – One hour following any US news reports (High or
Medium Impact)
E-mini Russell – One hour following the session open

Note: Reviews are completed post-session, not live.

This is a period in which you learn to see the scalping channel

opportunity, with the benefit of hindsight.

Your goal in this stage is to develop belief in the scalping channel.

Learn to trust that if your bias for future channel-flow is correct,
then the scalping channel offers significant opportunity to profit.

Buy a folder for storing your post-session reviews. Start filling it with
charts with hand written notes of hindsight based analysis. The
following is an example of the kind of post-session review required
to maximise learning.
2. Simulation

Implement a minimum 20-session period of simulator training with

real-time data.

Trade exactly as if you were doing this live. This includes effective
application of your money management plan, as discussed in YTC
PAT Vol 4. Treat this like a business. If you hit any of your session,
weekly or monthly drawdown limits then STOP trading. Review your
results; regroup and then either continue or start all over again.

Implement your Trade-Record-Review-Improve process, as per

YTC PAT Vol 5.

Pick just one of the sessions per day and Trade.

Record the results.
Review the session. Compare hindsight perfect trading with
your own results. Replay key sequences. Print charts, add
notes, and store in your session review folder.
And Improve.

The goal in this stage involves learning to implement your plan in a

safe environment without financial risk:

`. Learning to see opportunity in real time at the right hand edge

of the screen
a. Building confidence in placing limit orders ahead of time
b. Building confidence in being able to manage a position, in order
to minimise risk and maximise opportunity.

With every second of deliberate practice, you are improving your

intuitive ability to perceive and react to shifting signs of strength or
weakness within the price action.

At the end of 20-sessions, if you are not profitable (after

commissions and expenses), then continue with this stage of
learning. Continue tracking your stats for a rolling 20-session
period. When you get profitable, and stay there for 5-sessions,
advance to the live market.

3. Live – Minimum Size

As for the simulation stage, but this time the process is repeated in
the live market with the minimum position size available (2-part
positions). If you cannot afford this then remain on the simulator
until you can afford it.

Trade-Record-Review-Improve.

Continue adding to your session-review folder. And continue with

other YTC PAT Vol 5 tools for deliberate practice.

Again… at any stage if you hit any of your session, weekly or

monthly drawdown limits then STOP trading. Review your results.
Consider whether you need to drop back to the sim for another
period of time. Otherwise continue.

The goal in this stage involves learning to implement your plan in the
live market with the smallest possible financial risk:

`. Learning to see opportunity in real time at the right hand edge

of the screen
a. Building confidence in placing limit orders ahead of time
b. Building confidence in being able to manage a position, in order
to minimise risk and maximise opportunity.

With every second of deliberate practice, you are improving your

intuitive ability to perceive and react to shifting signs of strength or
weakness within the price action.

Track your stats for a rolling 20-session period!

Only ever consider a size increase if (a) your stats show a profit for
the last 20-sessions and (b) your account balance allows an
increase, such that maximum position risk per trade will still be less
than or equal to 1%.
4. Live – Increasing Size

For each size increase, monitor the first 20-sessions carefully.

And again… at any stage if you hit any of your session, weekly or
monthly drawdown limits then STOP trading. Review your results.
Consider whether you need to drop back to the sim or a smaller
position size for another period of time. Otherwise, continue.

Most important of all… stop the size increases if itʼs going to lead to
position risk greater than 1% of account.

Your goal in this stage is for gradual increase of risk only as you
prove capable of managing each level.

Happy Trading,

Lance Beggs