Slot777 slot dana Slot88 slot thailand
Having a Plan Copy - tradingcourses.tradinglounge.com
Having a Plan

Traders have a choice.  Wing it and be lucky sometimes, unlucky sometimes; or map the route and have perhaps a less spectacular but smoother trading experience.

In other words, traders can treat their trading like a business!

Most successful traders are business minded and understand the importance of a business plan in their own businesses. From experience we know that there are different business models to choose from to suit the personality of the business and the owners.  The same goes for trading!
So when it comes to trading there is a need for both a
business plan
AND a
trading plan
(Scroll down and click on the links below to learn more about each of these two plans)

Why do you need a plan?

Plans will help make you accountable.  They will show you when you are off course. Planning and monitoring your plans can help to prevent losing focus, events happening too quickly that make you lose control of your vision, and then losing your money.
Your business plan is all about treating your trading professionally.
Your trading business plan is all about developing a realistic and systematic process and action guidelines.
Having a trading business plan will give you a psychological advantage .  You will approach your trading with more objectivity and discipline if you keep in mind that you are running a business.

Business Plan

Before a trading plan is created, developing a proper business plan is important.

A business plan can include:
  • creation of a business entity providing suitable tax structure for asset protection and minimisation
  • mission statement
  • goals and objectives
  • resources and financials
  • implementation plan.

Business entity

Whether you are trading as a hobby or as a source of income, establishing a legitimate business entity is essential if you want to take advantage of tax claims further down the track.  See your financial advisor for which entity will be most suitable for you.

Mission statement

Be clear about the focus you have for your business of trading.  Do you want to trade for enjoyment and interest or are you wanting to make significant profit towards securing financial freedom.  Maybe you want a combination of the two.  Make sure you document your missions statement to keep you focused.

Goals and objectives

Where do you want your trading business to go?  What are the major steps for accomplishing your goals?  Develop the motivation you need to see where you are going.  Be confident that you can make it and you will be positively rewarded for your efforts.  Make sure you keep you goals and objectives realistic and work within a range of tasks that are manageable.

Resources

Capture the resources you will need to be successful in your trading business.  How much time, money and energy will you have available to achieve your goals and objectives.  Can you financially and psychologically handle difficult trading times.

Implementation plan

There is  no right or wrong way to go about writing your business plan.  This government website has a template that you may find useful or just google ‘Business plan’ to get more ideas.
To help you get started, here are a few steps that you may want to consider in your implementation plan:
  • initial planning – including for contingencies for when things go right or wrong
  • education – where and how are you going to learn
  • research – understand what resources you will need to enable you to trade
  • operation – fill in the details of the operation of your business including the resources your business has at the present time
  • trading plan – build and test your trading plan (more on this in the next section!)
  • financial health check – can you afford to start in the business of trading
  • plan completion – write your business plan and make sure you include review periods so that you can measure your progress
  • START your trading business

 

Trading Plan

The purpose of a trading plan is to provide you with a realistic and systematic trading process as well as documenting each consideration relevant to successful and profitable trading.
Your objective as a trader is to built the most appropriate trading plan for YOU and your values, your belief structure and your financial situation.

To help you run your trading business, your trading plan will need to contain rules and guidelines that determine:

  • when you enter and exit trades
  • how much risk you will take
  • what tools you will use.

Whether you are trading as a hobby or as a source of income, establishing a legitimate business entity is essential if you want to take advantage of tax claims further down the track.  See your financial advisor for which entity will be most suitable for you.

In the next lesson we look at the specific components of a good trading plan.