Writing a day trading business plan

How to write a day trading business plan

Since I am updating my business plan I thought I’d share with you all that I include in mine. SPOILER ALERT! It’s a lot. To me, day trading is not a job, it’s a lifestyle. In this article I will outline what I think is needed in order to increase the probability of you succeeding in trading. That’s why I called this my trading business plan and not just my trading plan. The difference being that a trading plan, for most, only includes entry and exit rules etc. In a trading business plan I incorporate all the things outside of the actual trading as well. Although main focus will still be the trading plan. ‘Cause you know… No trading plan, no chance of making money consistently. I hope we can get through this without me boring you to death so without further ado! My how-to on writing a day trading business plan. 

Break it down for me!

Any task with so many intricacies and details and general shit to think off (ain’t that all the same??) it is best to break it down to smaller tasks. That’s why I’m writing this article first. To outline all the things needed to be done before comprising a total; your day trading business plan. Now this will take a while for me to write because as I’m writing I’m also going through all these points myself. So whoever is out there, you might wanna write it together with me. I hope to release a new article every week but forgive me if I can’t. Not that anyone’s reading this but I like to play pretend. Who doesn’t, right?! Anyone? 哭哭

Hurry along and give me the outline b*tch!

For some reason one of my inner voices is Samuel L. Jackson from Pulp Fiction. Moving along… Here are some of the things to think of when writing a trading business plan. There are other things but let’s get started and then we can always add tasks later. Things like if and why and how you would register day trading as a business. We’ll get to that at a later stage. For now, the things to work on first:

• Trading plan
  • How do you determine your market narrative?
  • What are your entry and exit rules? Basically, why are you taking a certain trade and what are you going to do with it?
• Risk management plan
  • What is your risk plan
    • per trade
    • per trading idea
    • per day, week, month
• Calculate sizing, risk, etc. template
  • based on risk management plan
• Error list
  • Give codes to the mistakes you can make when trading so that you can track and work on them
• Trade journal log Plan
  • Keeping track of details like entry and exits as well as reasons why, feelings you had during a trade
• Record keeping and review Plan
  • Keep track of details like probabilities
    • per trade idea
    • per week, month
    • how will you review the data from your record-keeping?
• Market prep plan
  • A plan to prepare you for the trading session
• Rituals
  • morning ritual
  • meditation
  • exercise
  • downtime; yes yes I even structure and plan my entertainment
• Playbook process plan
  • After each trading session take note of 1 trade that really made sense to you and define the details of it so that you can perhaps catch it in the future or trade it better
• Post-mortem plan
  • Daily Report Card plan
    • Did you follow your plan? Why or why not? (has nothing to do with making money or not)
• Goals review plan
  • did you follow your daily, weekly, monthly goals? Why or why not?
  • is it time to change focus on a different goal?

I know I know… It looks like a lot (and it is) but as you might have already noticed some of these plans are highly related to each other or perhaps redundant even. I’ll get to that later when I break each point down further in its own article. As I mentioned earlier it is a lot of work. Makes sense right?! Or else anyone could do it. Fear not my imaginary friend. You start somewhere and work your way through it. Easy peasy. 

Traders Anonymous

I often compare trading to alcoholism. Not that I’m an alcoholic. Or am I? It’s just that in order to understand and work on your addiction you first have to acknowledge it. And just like any addiction it is a self-established ‘sickness’. That means that when you feel that alcohol is interfering with your life it is time to do something about it. Only you can do that. Sure you sit in a circle and talk to others that are going through the same struggles. Traders can use a talking group as well, for sure. In the end, it’s you that has to carry your own load. As it is with trading. You know what your problem is. You know what to do or at least where to look to find out what to do about it. Only you know where to buy and where to sell. This is my long-winded way of explaining that you have to own your own plan. Own your business. Nobody can do what you do and you can’t do exactly what another does. Sure there can be many similarities but it will never be 100% the same. Therefore don’t follow another, be a leader and just follow me 🙂 Gotcha! 

Give some feedback

Did I forget to add something or just wanna say hi, share ideas, or just wanna troll me? Feel free my dear troll. Bring it on!