Creating a trading plan can be quick and easy or long, challenging and expensive. Let me tell you about how I went about creating my trading plan…so you know what not to do!
When I started my objectives were very clear – make a ton of money and retire. That was really the extent of my thinking. I didn’t have a clue how to do it or what my approach was, I just started buying stocks in companies that I thought were good…companies with names I recognised who had interesting businesses.
- I did some fundamental analysis – They all had revenue, some even had profits…
- I did some technical analysis – I looked at lots of squiggly lines on the charts…
- I convinced myself they were set to take off!
So I bought them … and waited and waited and waited … but nothing happened. At the time I could not believe that after all my “analysis” the stocks I bought didn’t go up. How could the market be so stupid and not see what I saw? Looking back on it I was being self-absorbed and arrogant. This is a common curse of beginners to the financial markets.
Looking back on it I was being self-absorbed and arrogant
Then most of the shares I bought started to fall … this was not right, so I consulted my squiggly lines on the charts (Most people call them indicators) and found a bunch of new indicators that disagreed with the other ones. Now I was confused…
Needless to say I did not have any trading profits to speak of. I tried one strategy after another and continued to slowly lose money until eventually, a couple of years later, I stumbled across one trade that changed it all – it was a trend trade which made a few thousand dollars.
I tried approach after approach until one day I
stumbled across one trade that changed it all!
That was when I knew I found my strategy…everything about the trade and the approach felt right and I knew that was going to be my trading strategy from then on.
Finally, I had something that worked FOR ME!
Gradually over the following years I refined my strategy, figured out some specific and realistic objectives and started creating a trading plan, my own trading plan! – cobbled together at first, but I progressively formalised and refined it. Most of my original plan came from my trading journal that I wrote as I made mistakes and got hammered by the market in one way or another.
Eventually I realised that all the scraps of paper I had notes written on was making it very difficult for me to improve what I was doing, so I started to write it all down in one spot – now I was getting somewhere! Creating a trading plan proved to be one of the best steps I ever took because it forced me to step back and really think about what I was doing, where my gaps were and how to increase my trading profitability.
Creating a trading plan was one of the best steps I ever took
I wrote in this document and refined it and added to it over a long period of time…and then I realised that this would be so much easier if I just had a trading plan template, a complete workbook to go through. I had done some trading courses and read a lot of trading books by that time, so I took my own experience, and I adapted information from many courses and books and started creating a trading plan template for myself – and boy did I have some gaps in my own plan!
I filled in the gaps and produced a pretty good trading plan – even if I do say so myself. That plan has served me well and helped me make a ton of money from the markets.
Creating A Trading Plan Could Have Been So Much Easier!
By this time I had realised that creating a trading plan could have been SO much easier had I just approached it in the right way to start with…instead of taking years it could have taken weeks or even days ! So if you want to save years when creating a trading plan for yourself, here is my number one tip:
Start creating a trading plan TODAY using a trading plan template that is complete and covers all aspects of your trading business
Just by filling in the blanks you will get a lot of it done in a few hours. The rest of the detail will take some research and testing, but it will be years faster and you will get a much better result than you would have going about it the way I did.
If you haven’t got a trading plan yet then click the button below and get your free video training course on how to creating a trading plan so you can get started today.
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