Q: How many pages is typical of a sufficient detailed trading plan? And how might one go about SIMPLIFYING to focus on what matters most?
@MikeBellafiore
SMBU recently sent a survey to the SMB Trading Community asking of their trading frustrations. From this survey we ferreted out the top five trading frustrations. Then we held a Webinar to offer solutions. During this Webinar we were asked the question above.
In One Good Trade I discussed the seven principles that comprise One Good Trade:
1. Proper Preparation
2. Hard Work
3. Patience
4. A Detailed Trading Plan
5. Discipline
6. Communication
7. Reviewing Your Best Trades
A detailed trading plan means you can answer these two questions when you enter a trade:
a) Where will you exit if you are wrong?
b) Where will you exit if the stock trades in your favor?
These questions must be answered before you enter the trade. The more nuance you add when answering these two questions the more you will improve your results and have greater consistency.
Let me offer you a trading visual. This is one of my favorite exercises I perform on new SMB prop traders in NYC.
If you were sitting on my desk, and I walked behind you on our trading floor, and asked you where you were going to exit the trade(s) you were in, would you be able to answer immediately? If not, then I ask you to take a walk and return when you are ready to be a prepared pro trader. This is a detailed trading plan.
Related blog posts:
Being Too Cute
Part of Being a Successful Trader
You can be better tomorrow than you are today!
Mike Bellafiore
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