trading business plan?

[CarrieW]

does anyone here have one?

Ive been looking online to find some examples but havent found very much at all.

I was thinking of including the following areas not in order,

general trading rules
how to deal with drawdowns
money managment and risk control
schedule of trading
profit projections
growing my trading account
withdrawing rules
tax planning
when and how to funnel off into other investments
how and when to incorporate
worst case scenerio and plans to implement in case of

have I overlooked anything?

comments and critiques greatly appreciated!!!

 

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[slim_jim]

It appears you have some of the generalities, now focus your plan. Are you planning on day trading? Swing trading? You have to find what works for you. The style/type that fits your personality.

Here is mine, still a work in progress.....
How much money will be required to open an account?
How will I fund the opening of the account?
What market, index, stock, future will I trade?
Is there enough volatility and volume?
What is my profit target? Per day? Per week? Per month?
What is my max. daily draw down?
What is my total draw down before I stop trading to re-evaluate my stratagies and trades.
Begin tracking trading strategy opportunities during the trading day for verification of strategy.
Beginning strategy will be the trend is your friend.
Begin using paper account to learn the software interface.
Continue reading books and on-line for investment education.
Develope other trading strategies, like scalping.
Backtest other trading strategies.
When successful look for other investing opportunities-
long term stocks, real estate or build/buy business.
Set limit for number of days to trade without successfully reaching specified profit target.
Set limit for draw-down of initial funds.

Other considerations-
determining tax consequences of becoming a day trader with tax accountant.
do I need a new tax accountant?
should I setup a LLC for trading?
what are options for health insurance as self-employed?

Please comments and critique mine also.
Hope this helps you as you move into the fastlane.

 

[CarrieW]

at first I will be doing day trading exclusively. at least 15 days a month. I do have a scalping technique I am learning I will go between the short term strategy(less then 2 days) and scalping to grow my account.

some of my money managment rules are as follows.

after I get to the 5k level in my account I will divide my trading between the short term, scalping and longer term trades.

part of my money managment rules is to not risk more then 10% of my equity in any one trade untill I get over 2k then its no more then 2%. there is also a limit of 25% of my account equity at any given moment in the market at once. so I have to wait untill I get a bit more money before I can leave the long term trades sit or I wouldnt have enough to day trade on top of them.

I also have very structured stop loss rules(depending on how I am trading) to prevent large drawdowns per trade.

if I have 2 losing trades in a row I have to stop trading. if I drawdown more then 25% I have to stop live trading and go back to demo untill I can recoup the losses in the demo then I can return to live trading.

 

[slim_jim]

Some of my specifics are -
I will be trading the Dow mini.
I want to be flat at the end of the day.
Follow my rules for entries and exits.
My maximum daily drawdown is 2%.
My maximum total drawdown is 33%.
After 3 losing trades, quit for the day.
Not every day is clearly trending, so for a choppier market a scalping strategy would be in order.
Don't be emotional about losses or wins.
Don't be greedy, when profit target have been reached, quit for the day.

 

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[Edge]

Are your plans based on daily, weekly, or monthly targets?

 

[CarrieW]

mine will be on a daily target.

daily target will be between 1-5% gain of account equity at the minimum. If I can get higher returns then I will. 10-30 pips per trade is about average. (between 10-30 bucks)

 

[CarrieW]

heres a short article about trading plans.

http://www.kanetrading.com/free_art/differ.html

heres 2 excellent articles from investopedia.com on trading plans

http://www.investopedia.com/articles/forex/05/060205.asp

http://www.investopedia.com/articles/trading/04/042104.asp

 

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