Psychology Getting Started Money Management Trading Plan Template

In order to succeed as a professional trader, it is often said that the aspirant must treat trading "like a business". As with many of the clichéd phrases that litter the metaphorical trading floor, the importance of this statement is often overlooked, or the meaning misunderstood.

The following article by Tim Wilcox aims to address these problems by examining some of the ways in which a trader might go about achieving this vital goal.

It is divided into two sections: a general overview of what constitutes a trading plan and why it is prudent to have one, followed by a detailed analysis of the various aspects that should be considered during its creation, for example, the importance of self-awareness, discipline and risk management. Though the article is aimed principally at novices, traders of all standards are likely to find something useful within its pages.

Since the "Trading Plan Template" is considerably longer than our other articles, we have provided it as a pdf document, both for convenience and to preserve the original layout. Please click the link below to download it.

Trading_Plan_Template

 

[TheDuder_69]

I googled it up, found it in few seconds the other day. have a try, the file might be still up.

 

[aag100]

Hi,ive been dabbling with trading the dow/ftse for about 4wks.My account has been up nearly £300 but now im down about £10.Im still learning and its one hell of a roller coaster ride.The only "tools" i have is cnbc/bloomberg and yahoo finance which lags by 15mins.Could anyone tell me where i can get upto date charts and at what cost.It would be great to hear from you.

 

[davidday]

Great Article

Here is a short video I created on treating trading like a business to supplement this...

http://www.youtube.com/watch?v=DTUjmeQ5VQY

Cheers

 

[ramik]

BOX

I'M 7 YEARS IN TTHIS MARKET LIKE THE BOX SYSTEM.

 

[Jaco Ferreira]

Hi everyone! New to the Forum. I few weeks ago I downloaded the Trading Plan Template and set about completing it. I have been searching for a long time for something like this, and I am glad I went through the painful, laborious process of completing it. Well, in the end I actually enjoyed it and I think I may have overdone it a bit. But it has opened my eyes to many of the mistakes I made in the past. Anyway here is my version of my trading plan (I added a few bits to it not in the original). Thanks Tim, the template helped me in a big way!

 

[timsk]

Hi Jaco,
Welcome to T2W.

I'm pleased you found the Trading Plan Template useful. I've had a quick glance at your plan and one word springs to mind: wow! No one can question your commitment to take trading seriously and to do everything in your power to stack the odds of success in your favour - very well done indeed. As I say, I've not read it in detail, but two things jump out at me which you might like to give some extra thought to . . .

Firstly, on daily basis, your plan as it stands is too long and detailed to read. So, try to extrapolate a condensed version of no more than one page of A4 which has the key points on it: your trade set-up(s), entry, exit and stop loss losses etc. Also, what you'll do when things go wrong (which they will). Having bad days is pretty much inevitable for most traders - the key thing is to have mechanisms in place that prevent them from turning into disastrous ones. Know what those mechanisms are and how and when to apply them.

Secondly, many traders who read your plan will say your profit projections are unrealistically high. Quite a lot of traders have multiplied a small capital base like yours 3 or 4 times in a short space of time. Very, very few of them (I don't know of anyone ever doing here on T2W) have managed to maintain such growth in the medium term - let alone the long term. I've not done the maths, but I suspect that if you maintain your profit objectives for a year - you'll be a multi millionaire by the end of it! The key point here is that you'll quickly become disheartened if you fail to meet your targets on a regular basis. Looking at your table on P57, if I've understood it correctly, it looks as if you're hoping to make around 10% per day? In just 4 weeks, your opening balance of $1,000 has grown to $6,727.52. If you achieve and maintain it - you will quite literally - be one of the greatest traders that ever lived! IMO, it would be better to set a more realistic target and hit it consistently than an unrealistic one that you never reach. Your actual targets should be based on your trading record to date - preferably using real money as opposed to demo trades.

Anyway - well done so far and I hope it goes well for you.
Tim.

 

[Jaco Ferreira]

Hi Tim, thank you very much for your input so far. I will definately follow your advice and make the changes to my Trading Plan. I understand what you say about my daily profit targets as I calculated them with the daily targets. I actually intentionally did that so that I can work out an average weekly profit target, which came out to around an average of 60% increasse on equity. These initial calculations did not allow for losses, so I had a look at my numerous demo accounts while I tested my trading strategy, and figured that I more or less average 3 wins for every loss. So I included a 20% average loss into my calculations, and came up with a final figure of 40% increase on equity per month, or more or less 2% per day. That is the realistic figures I will be aiming for when I start trading live in January. I really appreciate your input with regard to making things simpler. Like I said, in the end I enjoyed the whole exercise so much I went overboard. The mistakes I made with my first live account makes perfect sense now that I have a tool to measure my performance. I busted my first $1000 live account within two weeks beacuse I had no clue whatsoever what it really meant to be a trader. Knowing how to use your platform and indicators means zero if you cannot manage risk, money and emotions. These are the critical aspects I did not understand and practise in the beginning, so the result comes as no surprize. Anyway, I will keep you guys informed on how the testing of my Trading Platform goes with a demo account. Maybe I wil upload weekly reports on how the trading plan, strategy and rules work for me. Thanks again.

 

[Jaco Ferreira]

Correction ... "testing of my Trding Platform..." should read "testing of my Trading Plan..." I have also attached an updated, more realistic version of my profit targets.

The table in the first file (Projected Daily and Weekly Profit Targets.pdf) is used as a hypothetical ideal scenario where I take no losses. The point of these calculations is to get an Average Weekly profit target.

The Average Weekly profit target is calcuated in the first table in the second file (Projected Monthly and Annual Profit Targets.pdf) by averaging out the weekly targets. This value is expressed as a percentage (rounded to 60% in this case), which I use in the second table to calculate monthly targets.

From demo testing over the last year and a bit, I have calculated that on average for every 1 loss I have 3 wins (1:3 ratio). This is how I got to the 20% I allow for losses every month. This should then leave me with a nett growth on equity of 40% per month, or 2% per day. This sounds a bit more realistic to me.

I better stop now else I will go on forever. It was fun working all this out on paper, now I have to test it on paper and compare the results.

Cheers, have a good day
Jaco

 

[Jaco Ferreira]

I'm dislexic today. In the last paragraph I meant to say test it out with a demo account.

 

[Issst]

Trading Plan Template: donwload

I can't seem to download the pdf file, it always sends me to the homepage of T2W. Even when copying the link...

 

[dan1986ccfc]

Re: Trading Plan Template: donwload

I can't seem to download the pdf file, it always sends me to the homepage of T2W. Even when copying the link...

Me too

 

[timsk]

Hi lssst & dan - try this one:
post #49 by dbphoenix
Tim.

 

[dan1986ccfc]

Good work, thanks

 

[timsk]

Re: Trading Plan Template: donwload

I can't seem to download the pdf file, it always sends me to the homepage of T2W. Even when copying the link...

If the pdf doesn't work - try this - it's the original MS Word doc.
timsk's post with Trading Plan Template
Tim.

 

[jp4t2w]

I am unable to download the pdf file nor the word document: "clicking" the file redirects you to the home page. Does someone have a solution?
JP

 

[Sharky]

Looks like there's a problem downloading the pdf from the article. We'll fix that on Monday, in the meantime Timsk's link above worked for me.

 

[Sharky]

The link is now fixed - somewhat later than anticipated. Thanks for your patience.

 

[Spinx]

Title

Would you like to have me upload my trading plan I created over the last year or so using this template?

 

[timsk]

Re: Title

Would you like to have me upload my trading plan I created over the last year or so using this template?

Hi Spinx,
Yes please!

 

[6th-high]

Hi

I used your template has a guide for my own plan. I would like to upload it to get feedback from professional/more experienced traders.

Are you still wanting uploads and if so how and where do I upload it?

thanks