by Charles Schaap 

Trade with a plan that limits capital exposure and 
preserves profit to the best of one’s trading ability. We 
need a pro-active trade management plan to get the most 
profit. Use a trend trading strategy when ADX> 25. 
 
It is a misconception that to be a ‘trader’ is to move in 
and out of the markets frequently. To be a trader is to 
simply have a plan for entry and exit. And there is the 
rub! Most people can’t wait to buy, to own their favorite 
stock, to be part of the ‘market’ but how to take profits? 
 
A click of the mouse these days and “you have stock”! Now 
how do we manage the trade, and profit and after we have 
profits, how to we maximize profits? 
 

Money management, trade management, and 
ultimately, self-management, are the keys to making money. 
 
There are two methods traders use to make a trading plan. 
There are those who follow fundamental analysis and those 
who use a technical approach. I prefer a combination. 
 
For my trading plan, the Great Xpectations from our 
ADXcellent Trade Letter takes care of the ‘fundamentals’. 
ADX is my indicator. 
An excerpt from ADXcellence Introduction: Most traders 
today are armed with too many indicators and too little 
understanding of how to use them. Keeping things simple is 
a major challenge for traders in today’s world of high-tech 
software, powerful computers, and a constant deluge of 
information. The excellence of ADX is simplicity and 
straightforward signals. 
 
This is my “ADX Trend Strength Rule” 
 
When ADX is above 25, trend strength is strong enough for 
trend trading strategies; when ADX is below 25, avoid 
trend-trading strategies. 
 
It takes discipline to be successful. It takes patience, 
skill, and knowledge to be good at anything we want to do 
successfully

Charles Schaap

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