How to Write a Good Stocks Plan

trading plan checklist - the following is a template example of a plan template example:

JUSTIFICATION

1. Stock Trading IS A BUSINESS, SUCCESSFUL BUSINESSES ALWAYS HAVE PLANS

• Businesses that are successful always start with a plan.
• Successful business planning will guide you to success, think of trade plan as a map: it's a constant reminder of how you'll consistently pull profits from the market.
• Difference between a successful trader & a losing stocks one is the trade plan.

2. TO KEEP ME IN THE RIGHT DIRECTION when Trading Stocks

Consistency is important in your trading routine to measure how successful you're.

Keep you on target, read the trade plan every day & stick to its rules.

When it comes to your plan you should think of it as a map which shows you this is what you follow, it should have clear rules which specify when you open or close trade.

Your plan should cover all aspects of stocks, you should read the plan every day until it is on your fingertips so that when you are transacting on the fast moving market of you'll always know what to do in every situation.

Your plan can be as simple or as complicated as you like, but the most important thing is that you have one. By having a one you have an advantage over the market, you'll have better chances of making a profit than those who do not have one.

This plan checklist tutorial topic provides with an example plan template that you can use for creating your own trade. By now you have already written down the justification part of your plan template, If not get a pen & paper & write the justification part. Next we shall look at how to write the system.

Stocks Trading plan is one of the secrets that can help you to improve your profits. A good training guide like this one should show you how to come up with one using a plan template which you can use as an example to develop your own trade plan.

One of the most common question is, Is Stocks Trading profitable? one of the techniques to make it profitable is to have a good plan.

IF YOU HAVE A GOOD Stock PLAN & YOU ARE DISCIPLINED ENOUGH TO STICK TO ITS RULES When Stock Trading, YOU WILL BE SUCCESSFUL.

GOALS OF THE TRADING SYSTEM

1. Ability to IDENTIFY A TREND AS EARLY AS POSSIBLE .
2. Ability to AVOID WHIPSAWS .

The trade system should find a compromise between the 2 Goals,

Find a way to identify a trend as early as possible but also find ways to help you distinguish the fake trading signals from the live ones.

FUNCTIONS OF EACH INDICATOR

MA - Identify a new trend as early as possible.

MACD - Identify a trend as early as possible.

Determine strength of a continuing trend.

RSI - Swing failure to confirm the begin of a new trend.

Extra confirmation tools to help determine the strength of our trend.

Parabolic SAR - Help to ensure that we aren't caught up on the wrong side of the trend.

Stocks Trend Lines - Signals a reversal when the line is broken

Stocks Price Action Signals - confirm the weakening of a trend.

Bollinger Bands - for price action study

To learn more about each indicator & how these indicators can be used to generate signal setups you can go to Technical Indicators Section

TRADING CHART TIME FRAMES

• Main timeframe is the 1H.
• Signals are generated on 15 minute time frame.

15 Minute Charts

• Stocks Trend-Lines (Support & Resistance)
• 5 & 7 LWMA
• RSI (14)
• Bollinger Bands (20, 2)

RULES

LONG ENTRY

Entry

15 Minute Charts

1. Both MAs are moving UP
2. MACD moving UP
3. RSI >-> 50
4. Parabolic SAR is below the price ( Support )

When signal is generated on the 1 Hour Chart, use the 15 minute chart timeframe to open and close positions.

LONG EXIT

1. RSI gives opposite signal
2. Stocks Price breaks Support Trend-Line
3. Parabolic SAR is hit (Trailing Stop)

RULES

SHORT ENTRY

Entry

15 Minute Charts

1. Both MAs are moving DOWN
2. MACD moving DOWN
3. RSI <-< 50
4. Parabolic SAR is above the price ( Support )

When trading signal is generated on 1 Hour Chart, use the 15 min chart timeframe to open & close trade positions.

SHORT EXIT

1. RSI gives opposite signal
2. Stocks Price action breaks Support Trend-Line
3. Parabolic SAR is hit (Trailing Stop)

ROUTINE

1. Signals are generated using 1H chart timeframe & executed using the 15 minute chart timeframe.
2. Trading signal to be executed immediately rules are met.
3. Entry alert trading signals should be executed during daytime.

TIME OF DAY TO WATCH MARKET - MARKET HOURS

Watch market during daytime when most companies and online brokers are open for trades. Use this to come up with a suitable program.

Example Plan Template

Tips - You can use the MT4 Software to save this as a stocks template that way you don't have to lay it afresh every time you open a new chart. If you want to learn how to save a plan template on the MT4 platform, read: MT4 Platform Guides.

Stocks Money Management

• Day trading - Low risk High return technique
• Trade when I have a high risk:reward ratio 3:1 or more
• Stop loss = Parabolic SAR

• Set TP target 40-60 Pips
• Never transact beyond Three % of account equity
• Never risk more than 2% on a single trade transaction

Stocks MINDSET/PSYCHOLOGY

• Trade without Trading Emotions (greed, fear, impulse, bias, anticipation, over-excitement)
• I trade what I see not what I feel.
• I will be patient.

My job description isn't to be the system!

It is not to decide which signal looks promising.

That is the job of my system - which has a set of stocks guide-lines which tells me this is what I follow. Don't get caught up in price action & make rules as you go along.

MY JOB DESCRIPTION IS

To sit patiently & wait for my strategy to indicate that it's time to enter or it is time to exit. And then with great focus I execute the plan as outlined.

Taking trades not indicated by the system, second guessing it and not taking trading signals given, hesitating & getting in late, anticipating & getting into trades early are all common place and boil down to lack of faith in the plan & not having a burning resolve on accurate trade execution.

GOAL: To have 100 Percent undivided desire on mastering my ability to execute my Stocks Trading rules accurately.

More you develop your ability to step back from price movement & watch market dispassionately, waiting for a signal, the easier it will be to witness the fluctuations of your emotions without getting sucked into them & allowing them to throw you off your trading game.

WEAKNESS

1. I am greedy.
2. I over-trade
3. Make a list of all your weaknesses that are interfering with your trading. This is first step to help you overcome these weaknesses. Use Stocks Trading psychology to help you to overcome them.

NB: by joting down your weaknesses you will begin recognizing them as you make progress, once you do this you will start to avoid these mistakes & your results will improve.

GOALS

• To focus on exit just as much as I do on entry trading signals.
• Always protect my account using stop loss, money management techniques, follow with the trend direction and always following the rules of my strategy.
• Never second guess or go against my strategy. To always keep up my discipline.
• Follow all the guidelines of my stock strategy & never break them.
• Transact fewer times & execute all my signals correctly. Trade what I see, what the system + charts are telling me.
• Sit patiently and wait for signals from my strategy.
• Achieve consistent stocks results before opening a live account.

FOLLOW THIS Stocks Trading SYSTEM

This is the most important part of creating the system.

Always follow the rules

Stick with the rules

Be disciplined & patient enough

Stocks JOURNAL

Log all my trades in a journal so as to track my training progress & improve my stocks execution trading methods.

This strategy uses momentum to determine the trend of any stocks.

Even if you are new to market and you do not know how a system looks like, this system template example illustrates to you how a trading strategy should look like, the Trading guides described in other sections of this training website will also explain further different aspects which you need to learn.

Hence, the objective is to help you create your own complete strategy that is if you are looking for one, by showing you one that's already complete. In fact you can just use it as it is, or make a few adjustments so that it suits your style.

The objective is to help you improve your results by using a plan, & another advantage is that this trade plan will offer you a chance to improve your knowledge and it will help you improve your results and help you make pips when stocks and keep them so that you do not keep giving them back to the market.

Read this plan training lesson about developing a trade plan of your own, along with learn courses and trading strategies listed at the tops of this learn lesson site.

The Most Beneficial part of using this plan template is the "Stock Money Management Part" you'll learn how to trade stock & minimize risk, which is the most important thing when it comes to trading the market.

Stocks Plan Checklist - How to Develop a Trading Plan in Stocks Trading - Stocks Plan Example - Stocks Plan Doc