A Winning Stock Trading Plan

Once you have a plan and system for trading, it will be your guide to success. You can change or tighten up any part of your system as you proceed to trade and learn.

Below are a group of questions to help you put together a dynamite stock trading plan.

• How much money do you have to open your trading account? If it’s an investment account, how much will you put in each month?
• What are your near-term goals or multi-year financial objectives and how will you go about tracking stock trades?
• How will you choose the best stocks to buy?
• How much capital from your stock market portfolio will you trade on any one stock position? (A set amount or one based on the volatility of that stock [ATR].)
• How and when will you do your stock research?
• If you have more good candidates than you can purchase, how will you choose which one(s) to buy?
• What is the maximum number of positions you'll have in your portfolio at any one time?
• When will you purchase more of a holding?
• How will you determine the stock market trend to determine the best times to buy?
• What kind of order will you use to enter a position?
• When during the day, week or month will you place stock orders?
• How often will you reevaluate your positions or look for stocks to purchase?
• How long will you keep any nonperforming stocks?
• How and when will you exit a loss by selling stock?
• How and when will you exit a gain?
• When will you review any stocks that you sold?
• What type of triggers, stops or alerts will you use?
• How often will you revisit your progress and compare to your goals?
• How will you continue to improve your trading skills?