Skip to main content

A DETAILED PLAN BEFORE EVERY TRADE

 “The best trader is a prepared trader.” —Evan Lazarus-Partner, T3 Capital


The next time you are in a trade can you summarize your detailed trading plan in one sentence?

First, you need an exit strategy.

“You must have a backup plan for every situation.” And you must do this before you enter your every trade.

your plan should also include an exit strategy for if the stock trades in your favor. What will make you cover your position favorably? Will you exit if it trades at a certain price? Will you exit after a substantial move or when a large order appears? The details of the plan are important, but actually having a plan is most significant.

Look, if you are a developing trader, and you do not develop a detailed trading plan before every trade, please do me a favor. Go find all of your trading records. Secure a fireplace and a match. Take these “trading records” and light them on fire. A paper shredder would be just as effective. Your “trading records” are meaningless. Your trading results are only significant if you have followed the fundamentals used by all consistently profitable traders (CPTs). And a detailed plan for every trade is one of them. Now go and extinguish that fire, please. 

Comments

Post a Comment

Popular posts from this blog

Maximizing Your Profits with Scoring

SETTING YOUR MAXIMUM INTRADAY TRADING LOSS First things first: set a max intraday trading loss. There will be days when you just do not have it. Why do you think coaches pull their players when they are not playing well? They are more harmful on the field than off. When you are underperforming, you are hurting your team and your trading business. You need a system to yank yourself over to the bench. A stop loss is your answer. TRADING BASED UPON THE TIME OF DAY A good trader makes note of what time of day it is, when he trades most profitably, and adjusts his trading to fit such times. Your numbers at the end of the month will not reflect your true trading potential. Make the most trades with the most size during the trading periods that statistically are most profitable for you. Money saved during your weaker trading periods is money earned. Consistency The fact is that most trades you make will start working for you right away. But the new traders also hold stocks that are trading ag...
Post a Comment
Read more
 Loss is painful, guilt can be devastating. Worse than losing one's dream is the knowledge that the loss was self-inflicted. Problems are solutions that have outlived their usefulness. Problems are pattern that were learned in emotional circumstances during one period of life and that now have taken an existence of their own. Many times, outdated solutions replay themselves in a variety of life situations, leaving people mindlessly repeating their mistakes in work, love, and trading. There can be no free will for people who are locked into patterns developed for past challenges. Successful traders are therapists both learn to do what comes unnaturally. The resolution to problems can be found in what people are doing when those problems are not occurring. The problem with many traders is not that they have problems, but that they are focused on their problems. It is this problem focus that prevents them from appreciating what they are doing right, that blinds them to solutions alrea...
Post a Comment
Read more

So what is your money blueprint set for?

Are you programmed for managing your money well or mismanaging it? Are you a spender or a saver ? Wealth principle: The only way to permanently change the temperature in the room is to reset the thermostat. In the same way, the only way to change your level of financial success "permanently" is to reset your financial thermostat. You can become an expert in real estate or the stock market. All of these are tremendous "tools." But in the end, without an inner "tool-box" that is big enough and strong enough for you to create and hold on to large amounts of money, all the tools in the world will be useless to you. Your income can grow only to the extent that you do. Remember that the first element of all change is awareness.Watch yourself, become conscious, observe your thoughts, your fears, your beliefs, your habits, your actions, and even your inactions. Put yourself under a microscope. Study yourself. Wealth principle: Consciousness is observin...
Post a Comment
Read more