Show Me Your Plan... What? No Plan?

Should you treat your investing like a business, and have an investing business plan? When you consider that the greatest source of failure among traders, is their lack of planning, the answer is a resounding yes!

There's a common characteristic among successful people and businesses, they set goals, and they create plans to achieve those goals. Their plans consists of a series of milestones, a strategy to reach those milestones, and a tactics that break down the plan into manageable chunks and provide feedback so the plan can be adjusted as necessary.

Trading is no different. Those that fail to plan are destined for failure. So, what do you have to do;

Q: Should I write a trading plan? 

A: Yes. 

Q: What are the components of that plan, how do I write it? 

A: I show you what should be in the plan, and provide you with a template to get you started. Here's the list of things that your investing plan should contain:

Your vision: What are your reasons for trading?

State your goals: What is the draw, making lots of money, how much, in what time frame, for what purpose? Be specific.

Do you have a niche, a specialty? What separates you from the pack, why won't you fail when so many others do?

State your weaknesses, and how you plan to mitigate them and leverage your strengths.

Will trading be a full-time venture, in your spare time, or something in between?

What will be your trading style? Day trade, swing trade, position/trend trade or some combination?

What markets, sectors or groups of stocks/securities are you going to trade

What will your methodology be for executing trades

What are your criteria for entering a trade?

What are your criteria for exiting a trade?

What are your criteria for exiting a trade?

What is your money management strategy?

What will be your measures for success, the metrics you will track?

What are your mitigation strategies, to recover from the mistakes you are bound to make?

What broker, which tools, and where will you conduct the trading? Do, you need a dedicated office?

How much money are you starting with? Is it yours, or are you trading by proxy?

Have you considered the tax ramifications of your trading strategy, do you have a competent CPA?