How to Make Stock Trading Plans - Trading Goals - Candlestick Patterns Explained by TechniTrader®

List of 8 Includes Establish Your Basic Trading Style

“Trading Plans” (or what I usually call “Trading Goals”) are specific things that you write down. You should have quarterly goals for your Stock Market 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:

Learning and honing trading skills include writing down 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 stock trading methods and rules, write them down, and stick to them regardless of what your trading friends are doing.
Stock share sizes: As you become more skilled and more profitable, your share sizes need to be incrementally increased. I recommend 100, 200, 300, 500, 1,000, 1,500, 3,000, 5,000, 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.
Points or gains you intend to make. These 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 months’ 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.
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 better at Swing Trading, Position Trading, or Options Trading. Stick to the style that suits you and nets the highest gains.

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Trade Wisely,

Martha Stokes CMT

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