10 Steps to Building a Winning Trading Plan

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Trading can be as unstructured and wide-open a venture or a structured and quantified approach as we dictate conditions and parameters for. There are two general schools of thought when it comes to operating a trading method or approach. One side believes we should trade day trading options as a business plan examples minute of every day, trying to maximize all potential profit opportunity without missing a beat.

Another side believes it is prudent to target specific goals and if hit, bridle day trading options as a business plan examples or shut down for the duration until next period arrives. In other words for intraday traders, trade all day every day or trade for x-dollar profit and call it a day until next session.

Common logic coupled with human greed points to the fact that some sessions or periods offer outsized profit potential. Then there is the aspect of judging trader performance based on potential profit opportunity. All true to various extents. But no trading career is ever based on extreme market conditions. High volatility and large-range sessions are a welcome gift when presented. A brief, welcomed gift. What if we opted to construct a business plan based on steady, consistent performance objectives that are reasonable to meet on a regular basis?

Instead of grading our performance relative to max potential gains every day, what if we graded performance on achieving reasonable goals averaged consistently over extended periods of time? Needless to say, just about everyone has toyed with a progressive table at one time or another and pondered possibilities. How much fun that would be. What if we held ourselves accountable to the concept of steady, consistent performance unattached to market behavior?

If so, would it make sense to judge our individual performance against any other measure? Too day trading options as a business plan examples times a trader will be their own day trading options as a business plan examples boss when it comes to judging performance.

Holding oneself accountable to unreasonable standards only leads to one end: On the other hand, if we can visually see that small to modest incremental growth does lead to potential results acceptable enough in the end, that can serve as a guideline of measure to keep us grounded. There may be slight to vast differences when in comes to emotional management with small accounts versus large, but the science or math goes unchanged.

Summation Traders need some sort of measuring stick to follow as a guide for measuring performance and production. It cannot be ridiculously low or unreasonably high to achieve. Basing some type of table on personal ability, potential from market s traded and other known variables are pulled together for comparative measure.

That type of baseline gives us permission to target realistic goals rather than unrealistic or even unstructured goals of performance. Many traders desire while others eschew such business plans. How we get there and why is up to each of us along the way.

Austin Passamonte is a full-time professional trader who specializes in all commodity markets. Austin trades privately in the Finger Lakes region of New York. At Connors Research, we are using it as an overlay to many of our best strategies to make them even better -- now you can, too. Austin Passamonte is a full-time professional trader who day trading options as a business plan examples in E-mini stock index futures and commodity markets.

You can find more of Austin's work at his website CoiledMarkets. The Connors Group, Inc.

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It should be noted that there is no special software required to use these templates. All business plans come in Microsoft Word and Microsoft Excel format. Each business plan features:. The Company was founded by John Doe. Day Trader will solicit capital from accredited investors defined later with the intent to use this capital to make investments marketable securities that will be traded aggressively on a daily basis and with the usage of extensive leverage.

Management anticipates that a substantial amount of the income generated by Day Trader, Inc. The third section of the business plan will further describe the day trading operations of the Day Trader, Inc.

Briefly, the capital will be used as follows: Doe has more than 10 years of experience in the day trading and investment management industry. Through his expertise, he will be able to bring the operations of the business to profitability within its first year of operations. Doe expects a strong rate of growth at the start of operations. Below are the expected financials over the next three years. The Company will to undergo an aggressive expansion after the successful completion of the initial capital raising period.

As time progresses, Mr. Doe may seek to solicit funds from outside investors via a private placement memorandum so that the business operates more as an investment firm or hedge fund rather than an independent trading company. The Company is registered as a corporation in the State of New York.

Below is a breakdown of how these funds will be used: At this time, Mr. At this time, Management has not outlined a divestiture strategy for Day Trader, Inc. Management will make investments directly into marketable securities including stocks, bonds, options, and related securities. The Day Trader may also engage a covered call strategy that would allow the fund to amply it return on investment for securities that are held for an extended period of time.

This section of the analysis will detail the economic climate, the day trading and investment management industry, the customer profile, and the competition that the business will face as it progresses through its business operations. Currently, the economic market condition in the United States is in recession.

This slowdown in the economy has also greatly impacted real estate sales, which has halted to historical lows. The financial services sector has become one of the fastest growing business segments in the U.

Computerized technologies allow financial firms including independent day traders to brokerage services anywhere in the country. In previous decades, most financial firms and traders needed to be within a close proximity to Wall Street in order to provide their clients the highest level of service.

This is no longer the case as a firm can access almost every facet of the financial markets through Internet connections and specialized trading and investment management software. With these advances, several new firms have been created to address the needs of people in rural and suburban areas. It should be noted that many day traders actively focus on generating income for their own accounts without having to accept capital from third parties.

As such, there has been the recent question as to whether or not these individuals are considered to be part of the securities industry. It is anticipated that the next US Economic Census will determine whether or not the individual trading activities of individuals falls into an industry segment. Day Traders should they decide to raise capital from third parties have a very limited scope of people to which they can market their investment portfolio. This is especially true for the Day Trader as the Company will use marketable securities as its primary method of its day to day revenue generating activities.

Among people that the Company may solicit for investment, Management has identified the following demographic profile: Strict regulatory oversights prevent the Company from marketing the day trading operations to anyone that is not considered an accredited investor.

These regulations may become more stringent as the Securities and Exchange Commission moves to have greater regulatory oversight over the hedge fund industry. As the business intends to operate via free market trading, it is very difficult to determine the competition that the business will face as it progresses through its business operations. However, should Management decide to raise capital from third parties then the business would be competing against several thousand hedge funds and investment advisory firms that engage in active trading on behalf of their clients.

This is one of the sections of the business plan that you must write completely on your own. The key to writing a strong competitive analysis is that you do your research on the local competition.

Find out who your competitors are by searching online directories and searching in your local Yellow Pages. Once the business decides to raise capital from third parties, Day Trader, Inc. Below is an overview of the marketing strategies and objectives of the Day Trader once capital raising activities commence. As the Company cannot directly market its trading services to the general public, the Day Trader will hire a capital introduction firm to showcase the operations of the business to potential investors if Mr.

Doe is capable of developing an ongoing track record that would warrant an investment from third party firms. These firms, for a commission, will introduce potential investors and investment groups to Management. These companies maintain extensive lists of accredited investors and institutions that frequently make investments into private investment companies. If the Company wishes to seek additional outside capital, Mr. Doe will also make presentations at popular hedge fund conventions while concurrently obtaining speaking engagements among other investment meetings so that his visibility and that of the firm increase over time.

In this section, describe the pricing of your services and products. You should provide as much information as possible about your pricing as possible in this section.

However, if you have hundreds of items, condense your product list categorically. This section of the business plan should not span more than 1 page. In this section of the business plan, you should write a two to four paragraph biography about your work experience, your education, and your skill set. For each owner or key employee, you should provide a brief biography in this section. However, the Company intends to use a number of investment strategies that will ensure that the firm will produce profits regardless of the general economic climate.

Expanded Profit and Loss Statements. Please note that the financials in this complete free business plan are completely fictitious and may not match the text of the business plan below. This free business plan demonstration purposes only. If you are interested in purchasing the completed editable MS Word and Excel documents for this business plan, please click the button below!

Also, the text of the business plan is formatted with a fully automated table of contents. Return to Samples Page It should be noted that there is no special software required to use these templates. Each business plan features: All plans are updated for !