Plan Your Trade and Trade Your Plan
Here is a simple trading plan that I use and it is not dissimilar to
one used by Warren Buffett.
What do you want to trade?
Why?
- Fundamental (What is your reasoning?)
- Technical (Do the technicals confirm the trade)
- Strategic (How does it effect other positions)
- News- ( Careful is it already in the price?)
- Hedge- Why not cut down or cut out?
- Tip- Don't be a sucker!
- Bored- Do some research then!
How?
- Immediate
- Breakout- Stop Entry. Clarify the level.
- Incremental- Pound cost average
Target?
Stop loss?
- Is it much closer than target?
- Is it on a big level? Wriggle room
- Lose less than 4%? Allow for slippage
- Correlation against other positions?
- In a losing streak? Cut size
- Markets Volatile? Cut size