YOUR Trading Plan, Part 1
You are unique (and you don’t need me to tell you that). The desire to find a trading plan that’s right for YOU is of paramount importance, because we are all a little different.
When it comes to your chosen trading methodology, you need to determine a number of things about yourself before going forward. These are things like your trading timeframe, risk tolerance, directional bias, and desired setups to pursue.
That’s the beauty of trading, you know. The market offers you the ability to custom-design an approach that works for YOU. Ask yourself questions such as…
* Will you be day trading for smaller but more frequent profits, or will you be entering positions for several days or weeks?
* Will you be comfortable keeping tight stops of just a few percent, or are you comfortable allowing more breathing room for trades in order to reach a more distant profit objective?
* Are you comfortable short selling, or do you prefer to only buy stocks?
* Are there specific patterns which you really like to trade or have found success with, such as buying dips within uptrends or perhaps buying breakouts?
These kinds of questions which can only be answered by you, but you MUST determine those answers in order to be effective. Those answers are paramount to your finding the proper strategy for YOU. I cannot emphasize that enough. Otherwise, you’ll be chasing different strategies by the day, but never knowing what’s working best and what to completely avoid. And if you’re dabbling in strategies which don’t suit you, you will not trust them or commit to them.
So when it comes to your trading plan, the more clear you can be on who you are, the more clearly you can define what it is you should be trading – and (equally important) what you should NOT be trading. That last part gets many traders in trouble, they stray into unfamiliar territory and find themselves making poor decisions which prove costly.
Since this is Part 1, there’s obviously more to come. But before the next part arrives, you have some homework to do – answer those questions above. I don’t want to know the answers to them, but you’re going to need them. Otherwise, the info to follow will carry no significance to you, rendering your time (and mine) completely wasted. Don’t be “that guy!”
I’ll see you in Part 2.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
