A Simple Trading Plan, Not Quite

Question:
I have read lots of books on technical analysis and trader psychology, yet my trading is NOT getting any better!!!! I need to formulate a simple business plan, but have no idea how to do it! I'm a silent reader of your blog and realise you are a helpful person. I would appreciate your feedback. Thanks

From ..... leonard

Answer:

Hi leonard,

Reading books is important and helpful, but it does not guarantee you will succeed. Med students read books and study, but it takes years of practical experience to become a doctor. This is the key >>> practical experience. As well, the information in books is just that >>> informations. You have to be able to apply it successfully, which seems to be your problem.

My sense about you is that you are impatient ........

ZL feel this because you tell me you are not successful at trading, yet you now want to develop a plan. How is it that you are (in the first place) trading at all without a plan, simple or otherwise? Patience my friend, patience!!! Read, learn, plan, practice, and apply. These are the steps.

As to your “simple” plan, start with the following. Define your characteristics as a trader.

# Are you patient, calm, careful, knowledgeable, and realistic?

# Assess your capital. Is your capital adequate to make many small trades to gain experience?

# Study your markets. Do you thoroughly understand the markets you are trading?

# Define your profit loss targets based on your capital. Do you have an entry/exit strategy?

# Assess your information/research capabilities. Do you understand the big picture, the context surrounding your markets?

# Establish your trading parameters (time commitment, goals, approach, and bookkeeping ).

# Do you treat your trading like a business?

Once you make your assessments, identify your weaknesses and correct them.

This may take some time, but it is necessary.

As you can see, you need more than a simple plan to succeed. You need a wide understanding of trading as an holistic enterprise, something you commit to doing, something that is more than playing a hunch, trading on tips, or hoping for the best. Trading is work, and you need to begin with the basics and work your way into success.

You will find much you can add to this outline I have given you, but that is your work. Get to it and make some money!

Trade in the day; invest in your life …..........

Regards,
ZL