What does my “trading plan” need to have?

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  • #193787 Reply
    Seamus

      So I’m gettin’ into this whole trading thing and tryin’ to get better at it (not just here to get rich quick… I know shocking lol). I actually wanna build skills that last, like real-deal strategies I can count on.

      I’ve been diving into books, YouTube vids (tho let’s be real, half of them are just people sellin’ dreams).Every “expert” out there is like, you NEED a solid trading plan. Ok cool… but, uh, what does that actually mean?

      What’s this so-called “plan” gotta have? I’m thinkin’ obvs like, goals, risk management, what kinda stuff I wanna trade, etc. But what ELSE? And how am I supposed to mash this all together into a plan that actually, like… works?

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      • #193855 Reply
        norkron

          Yeah it’s quite disconcerting when you first start out. Everyone talks about having a trading plan and what that basically means is:

          What are you going to trade?(stocks, options, crypto, forex)

          How are you going to trade it? (long term – weeks months years / short term – weeks days / day trade – hours, mins)

          What are  your indicators of buying? (news, earnings reports, candlestick patterns)

          How much money are you using and in turn expecting to lose / gain to make it worth it or to give up and quit?

          What are your goals for success / improvement goals?

          What platform are you going to use?

          Once you have all of those figured out then you need to read a book or 3 on your chosen path. Myself I am a somewhat newbie with day trading. Just recently quit my full time job and am trying to make a go of it. I trade stocks, use candlesticks, use the 5 minute charts and look for Bull Flags to buy in on with a stop loss in place and look to take profit about 4-7 mins into the trade. I use TOS and use their scanners to find high risers that develop into Bull Flags. A book that has changed my life though was one called Best Loser Wins by Tom Hougaard. This book though is best read after you’ve been trading for a bit. Hope all this helps….

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        • #193862 Reply
          UI_430

            Let’s be real – trading plans are great on paper, but the markets are WAY too chaotic. You can’t plan for every twist, and sticking to rigid rules can even hurt you when the unexpected happens (which is most of the time).

            The real skill is being able to adapt and read the market in real time, not follow some preset plan that can’t adjust fast enough.

            I wouldn’t get too caught up in having a 100 page trading plan.

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          • #193861 Reply
            Steve

              A trading plan boils down to these five essential ingredients:

              • Goals – Know your endgame (extra income? long-term gains?)
              • Risk Limits – Set hard numbers on losses per trade or per day
              • Strategy – Pick a style (eg day trading) and stick/adapt it
              • Entry/Exit Rules – Don’t just “wing it” on emotions; set clear triggers for buying and selling.
              • Review Cycle – Track every trade to see what’s working (or not).

              Make it simple, but keep it strict. A plan’s only as good as your commitment to it!

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            • #193872 Reply
              Efa

                Jumping into trading with the right mindset – love to see it! Getting a solid trading plan down is everything, especially if you want to build real skills instead of chasing hype. Here are some things to think about:

                1. Your “Why”

                Start by understanding why you’re trading. Are you aiming for long-term growth, financial independence, or just the challenge? Your “why” will keep you focused when the market gets volatile. Also, set specific goals. Something like “I want to grow my account by 10% each quarter” or “I’m working towards $X in profit over the year.” Goals like these give you benchmarks to track and adjust.

                2. Risk Management

                Everyone talks about risk, but it’s easy to overlook how much you’re really willing to lose on a single trade. Set rules here. For example, a common rule is risking only 1% of your capital on any trade. This keeps a few losses from wiping you out.

                3. Trading Style

                What’s your style? Are you a day trader or swing trader? The timeframe you trade on affects everything, from what markets work for you to the indicators you’ll rely on. Experiment here and document which strategies align with your skills, schedule, and goals. Find what works for you instead of following the latest trend.

                4. Know When to Pull the Trigger

                Outline specific criteria for when you’ll enter and exit trades. This can be based on price patterns, technical indicators (moving averages, RSI, etc.), or even news events. Write them down. If X, Y, and Z happen, you enter. If A, B, or C happens, you’re out. This helps remove emotion – and emotions are your worst enemy in trading.

                5. Know Your Mental Triggers

                Recognize that your mind is as much a part of the plan as anything on the charts. Write down how you’ll handle losses (like taking a break or reviewing your trades before jumping back in) and how you’ll deal with wins to avoid getting overconfident. Psychology is huge – find ways to keep your head level, no matter what’s going on in the market.

                6. Backtesting and Review

                After you’ve got your strategy on paper, it’s time to test it. Use backtesting tools or even paper trade (demo accounts work too) to see if it actually holds up. Once you’re trading live, set time each week or month to review your trades, identifying patterns and mistakes. This reflection will show you what’s working and what needs tweaking.

                7. Adaptability

                Markets change, and so should you. Build in some flexibility to update your plan as you learn and as market conditions evolve. Being rigid is a recipe for frustration, but having a framework you can adjust makes sure your plan grows with your experience.

                In short, a trading plan is not a “get rich” map – it’s your playbook, tailored to your goals, limits, and strengths. Draft it, refine it, and most importantly, stick to it.

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              • #193932 Reply
                Seamus

                  Alright alright, so it dont need to be more than dis then?

                  1. Goals

                  What I’m after: I’m aiming for steady extra cash each month, not a quick buck.

                  Keepin’ it realistic: Targeting around 2-5% monthly returns. Growth without gambling.

                  2. Risk Limits

                  Risk per Trade: I’m capping any trade loss at 2% of my account.

                  Max Daily Loss: I’m setting a hard stop at 4% max loss per day. this is my line.

                  Stop Losses: I’ll set a stop loss before every trade to protect my cash and avoid getting emotional.

                  3. Strategy

                  Style: I’m stickin’ to swing trading, so I’m holding trades for several days mostly.

                  How: I’ll use technicals, focusing on support/resistance and moving averages on daily and 4h charts. I’ll stick to one or two patterns I get (prly pullbacks or breakouts).

                  Holding Time: I’m thinking a few days to a few weeks depending on the setup.

                  4. Entry/Exit Rules

                  Entry: No more impulsive “I got a feeling” trades. I’ll only enter when the stock hits a support level and shows a strong signal, ya know like a bullish candle.

                  Exit: I’ll set a stop loss below entry and a profit target around the next resistance. I’m aiming for a 2:1 reward-to-risk.

                  I’ll only take trades that fit these entry/exit rules, no more winging it!

                  5. Review

                  Weekly Review: Every week, I’ll log each trade like why I entered, why I exited, and what happened.

                  Monthly Check-In: Once a month, I’ll take a step back and look at the bigger picture. What setups are paying off? What am I messin’ up? I’ll make tweaks based on data, not gut feelings.

                  I’m sticking to this plan no excuses!

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