[smuhr]

Good Morning,

All profitable traders talk about their Trading Plan so I would like your advises to define my own Trading Plan.

But what is a good Trading Plan ?
And what must and must not be written in a Trading Plan ?

Thank you,
Steven

[sep34]

The smple answer...A trading plan should cover every pertinent detail from Entry to Exit for any single trade or any strategy that you are using.

A Trading plan will cover and describe the setup it self, covering all imprtant factors.
Another part of your plan will cover the trademanagement part of your setup.
Another part of your plan might cover seaasonal tendencies or days that the market tends to behave differently for the particualr market you trade e.g. many Index future traders adjust their trading plan for the FOMC and other key market events, Quad Expiration, Winter holidays, Summer and Fall trading etc..
Another part of your trading plan might cover the psychological part of trading and executing you trade plan. off-course this is personal and may or may not be needed, only the individual can answer this....As mentioned before evey pertinent detail can be included in your trading plan as it will help you to be better prepared and to keep you honest.

Start a trading plan and As you begin this habit and cover the basics--over time the markets will tell you what other factors are also important to integrate into your trading plan based on your trade style and market experience.

[swansjr]

Originally Posted by smuhr »

Good Morning,

All profitable traders talk about their Trading Plan so I would like your advises to define my own Trading Plan.

But what is a good Trading Plan ?
And what must and must not be written in a Trading Plan ?

Thank you,
Steven

In my trading plan I discuss my overall beliefs in the market, what markets I trade, when I trade those markets, when not to trade those markets, my money management rules, how I will track my progress, goals for the year and most importantly: A detailed description (with images) on what setups to take.

[smuhr]

Originally Posted by swansjr »

A detailed description (with images) on what setups to take.

A trading journal and a Trading Plan is to different things, no ?

In a trading plan you define a set of rules about the way you will manage a trade
In a trading journal you describe all your trades

Is that right ?

[swansjr]

Originally Posted by smuhr »

A trading journal and a Trading Plan is to different things, no ?

In a trading plan you define a set of rules about the way you will manage a trade
In a trading journal you describe all your trades

Is that right ?

That sounds about right to me. In my Trading Plan I state I need to keep a journal and track my trading statistics. I even list what should be tracked. In short, my Trading plan lists what I should be doing as a professional trader. This includes keeping a journal and tracking statistics on my trades, which are both separate documents.

The Trading Plan is like a business plan that governs my trading activity on many different fronts. My Journal and Trade Record are historical documentation on my trades which are both used for tracking progress, finding weakness and overall, improving my skill as a trader.

[DugDug]

There are two ways to treat a trading plan
one - like a business plan - beliefs, goals, etc; Do this first to set out goals and try and see if this actually then matches step two
two - incorporating a trade journal as part of a daily plan. Show how you actually implement your strategy so that you can review the numbers.

Ideally you should have both - but I would imagine the second (a daily plan) is the one that is hardest to maintain and hence requires the most thought and discipline.

[smuhr]

In fact the trading plan is the first step to be a disciplined trader

Do you write your setup in your trading plan too ?

If some one can copy/paste the summary of a good and structured trading plan it will be very useful for beginners who want to write their first trading plan.

Thank you

[ramora]

Originally Posted by smuhr »

Good Morning,
But what is a good Trading Plan ?

Thank you,
Steven

I try and run trading as a business.

At the very least it includes the overall business plan. What funds to use, risk, accounts, expected return, etc. etc. One of the best examples is in John Carter's book "Mastering the Trade". At one time he would send the business plan template if you asked for it by email

Without that template think GOST:
Goals
Objectives
Strategies
Tactics


Then the day to day execution:

I like the book "Flawless Execution: Use the Techniques and Systems of America's Fighter Pilots to Perform at Your Peak"

They have excellent templates for pre-brief and post-brief that I use.

I have a written pre-brief and post-brief for 80% of the days I traded last year which is great to review my progress and helpful in planning next year.

Each night I do the paperwork and print the docs to a pdf file that I email to a private google group. During the day I can look at price levels and charts that I am following. I can review my progress at any time from any computer including my iphone.

I also use google docs to keep win/loss stats in an online spreadsheet.

It is a paperless process, all records are on my private google group and backup with a email copy to another account.

I hate the paperwork but trade better when it is done. Also the process alone prepares me for the next day. "Planning is more important than the plan."

Its a business. Now I am preparing my 2010 goals and objectives.

Good trading!