j) How Do I Write My Own Trading Plan ?
Having and sticking to a successful Trading Plan is a vital key to profitability and longevity in the stock market.
Jim Berg says: “The easiest way to learn to trade is to have someone take you, step by step, through a series of trades. You then learn their complete trading strategy, entry, stops, exits and why and how they act/react to price moves."
In his ebook ‘The Stock Trading Handbook - Fundamental and Technical Analysis Combined' Jim wrote:
“There is a well worn cliché “If you fail to plan then you’re planning to fail”. Unfortunately for far too many traders and investors, this is very true.
We cannot emphasise strongly enough the importance of having a Trading Plan which, at the very minimum, should list how an investor will:
Þ Evaluate market conditions
Þ Choose investing and trading strategies
Þ Select which share, fund, index etc to buy
Þ Detail methods for:
- Entry and exit conditions
- Money and risk management, including Position Sizing
- Stop Loss calculations
- Protecting profits
- Setting profit targets
Trading Plans must be written down, kept in a prominent position and most importantly, followed with discipline. In his books, Dr Alexander Elder emphasises the importance of keeping accurate records of all open and completed trades.
These can then be used as a basis for reviewing the success of the Trading Plan and for subsequent updates.
Many readers may already be aware of their need to have a Trading Plan but may be wondering how to start or update their current plan.”
So what are the consequences of not developing and sticking to your Trading Plan?
We warn that you will probably lose overall - and maybe lose in a big way……….
……… It’s only a matter of time.
Without a structured Plan, sooner or later you may change from being a conservative investor to trying to ‘overplay’ the fast track of speculative or leveraged trading …….. or may be overexposed in one sector…… or be holding too many positions …….. or too large a position ……and the market suddenly turns or, worse still, crashes.
Or maybe you will ignore your stop losses (if you’ve set them in the first place) and go into the BHP approach (Buy, Hope and Pray).
Or maybe you will listen, as we did at the start of the tech stock crash in 2000, to a licensed broker at a large Institution who advised us:
Þ “It’s not a loss unless you sell it” and
Þ “If it’s broken today, it’s fixed tomorrow” (meaning wait for prices to “come back”) and
Þ “Sell anything that’s even money or better” - which means you end up selling your best performing stocks and holding on to your losers.
I apologise for being brutally honest, but my reason is to help save you from yourself. Believe me it can happen. It did happen…… as a result …… after doubling on paper a large portfolio in only six months, we then lost our Sydney Harbour waterfront home in 2000 and were set back over 15 years financially …… plus went through terrifying emotional turmoil and stress.
I therefore write from real life experience in the school of hard knocks. We now know that if we had developed even a simple Trading Plan and had stuck to it with discipline - then we would not have been set back financially over fifteen years - let alone the emotional terror and distress experienced personally and by our family.
So it is with the utmost conviction that I now urge you to not only read this ebook, but then to take the time to sit down and actively create your own Trading Plan. Build it step-by-step using this Template, together with any other information you may have accumulated.
Take your time. Believe me it will be worth your effort. It will probably be the most valuable research time you ever spend in the market……………”
*********
The above text is an extract from the new co-authored ebook at this website:
“ How to Write Your Own Stock and Futures Trading Plan”
which includes:
Þ A detailed workbook to help you create your own personalised trading plan
Þ A free bonus Appendix by Alan
Þ Links to discounts for other training materials at this site
This vital ebook for your long term survival and profitability in the stock, share or futures market can be downloaded directly to your computer -- to help you start writing your own Trading Plan just minutes from now.
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i) Order it directly. To discover more - Click Here
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