My trading plan

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. By studying and educating myself on topics regarding economics, finance, trading, etc. and by trial and error. I have found some insight in what kind of trading that 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. It is the most analyzed and the most domestically traded stock index.
  • 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.
  • Long only trader
    I only trade based on the speculation that prices will be higher in the future.
  • Weekly time-frame trader
    I trade using the weekly time-frame. Using a the weekly time-frame allows for trading larger price movements spanning several month to years in length.
  • Weekend trader
    I trade when the stock market is closed over the weekend. This allows me time to evaluate my decisions.

My trading system

  • Market entry
    If the 50 weeks exponential moving averages have a positive slope. I enter the market by a few percentage market exposure per day.

    If the 50 weeks exponential moving averages have had a positive slope for 3 weeks, I enter with 145% market exposure.

    If the 15 weeks exponential moving average are above the 50 weeks exponential moving average, I enter with 145% market exposure.

  • Market exit
    The market exit signal is determined by a 10 weeks period chandelier stop. With every 5% additional market price appreciation, the chandelier exit signal multiplier is reduced by 0.25 from the starting value of 3.00.

    If market price depreciate to the level of the chandelier exit price. I exit the market.

    If the market depreciate to the initial entry before moving the chandelier stop above the initial entry, I exit the market.