Interview with Michael Milligan - Part 2

"I think that plans should be simple. The problem is not the plan, it is the discipline to stay with the plan."

** Trading Plan **


Q. We could spend days comparing technical and fundamental analysis, and many traders tend to favour one and dismiss the other – do you prefer one over the other? Do you use a combination of both? Briefly, why?

I use a combination of both. I like for my fundamental and technical analysis to give me the same reading. If they are conflicting I tend to not do the trade or make the recommendation.

Q. Do you have written trading plan detailing your approach? How would you describe it (e.g. long/short, detailed/broad, complete/work in progress)?

I do not have a written plan any more. I have been trading for so long that my plan is in grained in my head. I am a very disciplined trader. I have several key indicators that I focus on. If I do not see what I want I do not make the trade or recommendation. I have no problem sitting in cash on the side lines until I find a trade(s) I like.

Q. On a scale of 1 (simple) – 10 (complex), how would you rate your trading approach(es)? Do you have any comments on the simplicity or otherwise of them?

I think that my trading approach is very simple, but clients tell me it is not. I think that clients find it complicated because many do not have the basic understanding of trading principles. I think that plans should be simple. The problem is not the plan, it is the discipline to stay with the plan.

Q. Many traders acknowledge that having a trading plan is a key to success – it is essential. Yet, most people don’t know where to start to begin writing one, even though they understand the basics of trading. What would be your advice to someone stuck in this situation?

Just write down everything that you trade, why you choose the trade and were you successful? Once you have this written go back and analysis what worked and what did not work. Be honest with yourself. The key to long term successful trading is to figure out who you are and what works for that individual.

Read more from Mike in the Trading Mindset section ...

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