The Trading Plan and Evidence-Based Trading

A trading plan is the written answer to every question a trader faces before the market opens: what to trade, why, how much to risk and when to stop. Traders without one make those decisions under pressure, and pressure makes poor decisions. This course has you write a plan, test it and keep it current.

Where do good trading ideas come from?

From a process, not from inspiration. Published research on market anomalies, careful observation of your own market, and the patterns in your trading journal are the main sources. The course teaches a simple idea log: every idea is written down with its source before it is tested, so you can see later which sources produce ideas that survive.

Which information sources do traders really need?

Fewer than most pay for. Company filings, official data releases and an economic calendar are free; much of the rest repeats them. The course has you log the sources you use for eight weeks and judge each by what it added to your decisions.

What is evidence-based technical analysis?

Evidence-based technical analysis starts from an uncomfortable fact: most of what traders believe about charts has never been tested, and much of what has been tested failed. The scientific method gives a trader a way to sort ideas that work from ideas that only feel right. This course teaches that method to traders who do not write code.

An approach in which a trading idea counts as knowledge only after it has been stated precisely and tested on data the idea was not built from. David Aronson set it out for technical analysis, drawing on the philosophy of science and on research into how people misjudge evidence. The course teaches the method step by step and applies it to real trading claims.

Who is this course for?

Every trader on the trader path. No programming is needed.

What you will be able to do

• Generate trading ideas from a stated process, and log them before testing them.
• Rank information sources by cost, timeliness and evidence of value for your style.
• Write a complete trading plan covering markets, setups, risk, routine and review.
• Test the plan on a simulated record and revise it from the evidence.
• State a trading idea as a falsifiable claim with a measurable outcome.

Syllabus, module by module

1. Why a plan

   Decisions made in advance against decisions made under pressure.

2. Idea generation

   Observation, published research, market anomalies and your own journal as sources of ideas.

3. Information sources

   Filings, data releases, news services, research and social media, ranked by what they are worth.

4. Claims and knowledge

   Subjective and objective methods, and what makes a trading claim testable.

What every course contains

Every paid course comes with the first seven and the certificate, whichever level it sits at. The proctored exam and the credential come when the course is taken as part of a Certificate, Diploma or Fellowship. Everything is self-paced: the material is yours to study in any order, at any hour, for the whole of the license.

1. Workbooks. Written to train the thinking patterns and the important concepts of the course, with worked problems and the reasoning behind each answer, so that you learn to think the way the subject is thought.
2. Audio edition. Focused, well-presented recordings with explainers and examples of the material, made to be interesting, relevant and entertaining, so that the general subject can be learned away from the desk.
3. Notes. Pre-produced notes with every fact the course relies on, written out in full, so that nothing has to be transcribed from the films or the audio.
4. Cheat sheet. One sheet with every important learning concept of the course on it, to keep beside you during the work and to revise from before the exam.
5. Named sources. Every fact in the notes names its source, the paper, the book or the dataset, for anyone who wants to dig in further.
6. Explainer films. Focused films, in the style of the sample films on the catalog page, that walk through the most difficult concepts of the course with visual explanations of a high standard.
7. Transcript. A full transcript of every film and every audio recording, searchable and quotable.
8. Proctored exam. Taken as part of a Certificate, Diploma or Fellowship, the course ends in a proctored multiple-choice questionnaire, with a pass mark of 60% and three retakes included. A course taken on its own is assessed by its coursework and has no exam.
9. Verifiable certificate. A certificate of completion that a third party can verify: an employer sends the code on it to the credentials office and receives written confirmation of the course, the date and the result.
10. Credential of the program. The Certificate, Diploma or Fellowship of the program, track or path the course belongs to, awarded when every course in it is passed. Which one depends on the program you choose.

How the certificate is earned

Weekly planning exercises and two graded problem sets: an idea and information log kept for eight weeks, and a complete written trading plan with a simulated test and revision. On a pass you receive the Course certificate in the Trading Plan and Evidence-Based Trading, issued by the Institute with a verification code. A course taken as part of a Certificate, Diploma or Fellowship ends in a proctored online exam with a pass mark of 60%. The fee includes three retakes; each attempt after that carries a reduced proctored exam fee. A course taken on its own is assessed by its coursework and has no exam. Read how certification works.

Before you start

This course assumes the material of the courses below, or the same knowledge gained elsewhere.

• Stop Losses, Position Sizing and Your Trading Edge
• Trading Psychology, the Trading Journal and Overtrading