If you were starting your own business, you would normally put together a business plan - if you needed bank or private finance this would be a requirement - but quite honestly even if it were your money, more especially if it were your money, you should prepare one too. So why do you think it should be any different with the business of trading? If you're beginning investing, you need a well-thought out stock trading plan. Purpose of the trading plan |
Strategy, which markets and instruments you will trade Trading Objectives- your profit target, and any other objectives · Position Sizing - how much you will buy · Daily Gameplan - what will you do today? · Timing Entries - when and why you will buy · Stop Loss - when will you know that a trade has failed? · Open Positions - how long you will hold a trade · Timing Exits - when and why you will sell · Grading Your Trades - give each trade a 'pass' or 'fail' · Emergency Back-up Plans · Record Keeping This is not meant to be an exhaustive list, but this plan is better than more than 50% of other traders out there, because they don't have one at all! Once written, the stock trading plan need not change very often, if at all. It should be revisited occasionally to ensure its continuing relevance (and to make sure you are still sticking to it!), but it is not a document that drives specific daily or weekly actions - those actions should be set out in your daily or weekly game-plan. Back to Execution |
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Copyright © 2018 Mick Brooks
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