Trading Plans – Trading Goals for Beginners

Basics for Beginners In Stock Trading

“Trading Plans” or what I usually call “Trading Goals” are specific things that you write down. You should have quarterly goals for your trading, and perhaps even monthly goals if you are using trading profits for income. Then you should have 6 month, 1 year, and 5 year goals.

Your goals should include the following:

1. Learning and honing trading skills include how you are going to improve your trading, and what you are going to do to make that happen. Be specific and detailed. Step by step. Do not try every new gimmick or new system that comes along. Define your trading methods and rules, write them down and stick to them, regardless of what your trading friends are doing.

2. Share sizes: as you become more skilled and more profitable, your share sizes need to be incrementally increased. I recommend: 100, 200, 300, 500, 1000, 1500, 3000, 5000 and so on. As you become more proficient you raise the share size. If you make a serious mistake or start losing money due to a lack of discipline, then drop back the share size.

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3. Points or gains you intend to make. This should be monthly not daily gains. Most of you are not Day Traders and so a daily gain is not practical. A Position Trader might hold for 3 months with only a couple of points gained and then have a gain of 20 points the next month. Estimate a monthly point gain. This is based upon YOUR individual point gain success. This information is derived from previous month’s activity. The ideal is a year or more of data. But as a beginner, you won’t have this, so try for 3 months of data. Prior to 3 months you won’t know what you are capable of doing as this is very individual and varies widely.

4. Establish your basic style of trading. Sure you will mix and match sometimes, using Swing or Momentum Trading during fast moving markets and Position Trading during slower times. However generally if you watch closely, you will see that you are a better Swing Trader, or Position Trader, or Options Trader. Stick to the style that suits you and nets the highest gains.3.

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5. Establish 2-3 strategies for your trading style and stick with them. Traders try way too many strategies. It’s like being in a gigantic candy store with too many choices. Experiment when you are beginning, then choose those that suit your style and the ones that consistently yield the highest profits for YOU. What your trading buddy does isn’t necessarily going to work for you.

6. Specialists rule. Traders who specialize make higher profits. I know a trader who uses only dragon entries, another trader only buys stocks under $2, yet another won’t touch a stock under $50. Each is highly successful because they specialize and that makes them more focused. Specializing will make you more money. Define clearly what and how you are going to specialize in the market.

7. Profits: How you intend to use your profits, for example are you going to keep all of the profits in the trading account until you double the amount or quadruple your capital base? When and how much of the profits are you going to use for other purposes besides trading? You need to know this, especially if you are planning on using trading as for cash flow.

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8. Trading Expenses: this is a business and as a business you are going to have expenses. It costs money to make money, there is no way around it. However you should budget your expenses and not buy every trading system and charting program out there. You do not need a commentaries or stock advisories, as these only confuse and complicate what should be simple, clean, and easy. If your trading methods are complicated email me at info@technitrader.com and let’s simplify your whole operation.

Setting goals and planning your trading career will help you get off to the right start.

I invite you to visit the TechniTrader Learning Center to watch a variety of Webinars, and experience for yourself the excellence of TechniTrader education.

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Trade Wisely,

Martha Stokes CMT

Chartered Market Technician
Instructor & Developer of TechniTrader Stock & Option Courses

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