When you begin to explore the possibility of trading shares, all the books suggest you should have a trading plan. The problem when I first stated trading was I did not know the questions to ask myself or what I should put into a trading plan.
Ok I want to make money on the stock market – was about as far as I got.
This is why I am offering you this free Trading Plan template in hope it will get you thinking in the right frame of mind.
You will find most of the questions will need to be reviewed from time to time as your education, experience and knowledge of what is possible in the stock market grows.
WHAT IS A TRADING PLAN?
I’m sure you heard of the saying “Fail to plan and you plan to fail”
When it comes to the trading arena its true, you must have a trading plan written down and defined as much as possible. It does not have to be complicated.
A trading plan consists of several areas – your goals and objectives, your strategies to achieve those objectives and the specific detail in relation to your strategies such as entry, exit, and position sizing.
GOALS AND OBJECTIVES – in any area of our lives if we want to succeed we need goals to keep us on track. Goals help to improve our success rate, but unfortunately most of us spend more time planning our holiday than we do our financial future. Share trading is a business and as such it has to be treated like a business. Start with a main goal and work towards that using smaller goals – what I have to do this week, in six months time etc and keep adjusting the bar up. Setting goals is a fantastic way to build confidence and self esteem. You may need to work on areas such as computer skills, money management or a psychological fear of losing money.
Do not compare yourself to anyone – its just you, by all means emulate a mentor but don’t compare. You need to create a process that suits your beliefs and values.
People who fail to plan really do plan to fail.
STRATEGY – after you have decided that share trading is for you – and you have set your goals and objectives, you need a strategy or several to enter the market.
Consider a game of chess; a strategy is concerned with the evaluation of current positions and setting up goals and long-term tactics. To say to yourself – “I know what the chess pieces are called and I know how they move therefore I should succeed as a chess player”, is not good enough to win the game. You need to have a strategy in place – short term and long term. My short term goal is to force my opponent to take my knight in order for me to have his king exposed for a (long term goal) of check mate.
Wikipedia tells us “A strategy is a plan of action designed to achieve a particular goal”.
STRATEGY DETAILS
Your strategy will need specific criteria for you to move your chess piece – what has to happen before you make a move? Even from the very first play in chess, of which there are standard opening moves, it has consequences further into the game.
The stock market is like an emotional game of chess involving money. To try and smooth your emotions, your strategy will have to consider the following components — a set up, money management, entry signal, trade management and an exit signal.
If we can help you in any way or you would like a copy of our free trading plan template that will help you develop a trading plan that suits you, please Register and become a member.
Testimonials
"Hi Rob, Thank you for another informative session to round off the series.
Your depth of knowledge and ability to deliver it in an easy to understand and relaxed
format proved invaluable in my share market education. I am already looking forward to
Thursday´s support meeting".
Robyn.
"Hi Rob
I would like to say a "special thanks" for the five great workshops that you delivered. Your knowledge, energy and enthusiasm is very genuine and I have to acknowledge that it was a privilege to attend all the sessions.
My next "hurdle" is the practical application of all the theory and hopefully I will develop in time "the guiding light" that you seem to have at your fingertips.
I really appreciated your efforts, patience and sense of humour especially when "the audience" was drifting to the twilight zone. There was a lot to take and you delivered a summary version of the very complex subject very, very effectively.
My next goal is to start experimenting with the Index.
Thousand thanks and see you on Thursday.".
Ana
"Having no trading exposure and by undertaking this workshop has been invaluable.
It has been practical, easy to understand and has provided essential knowledge and crucial
tools to trade with.".
Ayshe
Disclaimer: The stock market is a risky business, please note that Rob Shelley
is a Certified Financial Technician (CFTe) but is not licensed to give information regarding personal circumstances.
The Information within this website is for educational purposes only; participants seeking financial advice should seek
to consult an authorised professional and licensed advisor.