Writing a day trading business plan

01 Nov 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!