Psychology Getting Started Money Management Trading Plan Template

In order to succeed as a professional trader, it is often said that the aspirant must treat trading "like a business". As with many of the clichéd phrases that litter the metaphorical trading floor, the importance of this statement is often overlooked, or the meaning misunderstood.

The following article by Tim Wilcox aims to address these problems by examining some of the ways in which a trader might go about achieving this vital goal.

It is divided into two sections: a general overview of what constitutes a trading plan and why it is prudent to have one, followed by a detailed analysis of the various aspects that should be considered during its creation, for example, the importance of self-awareness, discipline and risk management. Though the article is aimed principally at novices, traders of all standards are likely to find something useful within its pages.

Since the "Trading Plan Template" is considerably longer than our other articles, we have provided it as a pdf document, both for convenience and to preserve the original layout. Please click the link below to download it.

Trading_Plan_Template
 
Last edited by a moderator:
Deleted Posts

In light od Dbp's decision to delete his posts, I have followed suit as most of mine were in response to his, if you catch my drift.

Thanks for your posts Frugi and Sandpiper; I take note of your comments and welcome the humour.
:LOL:
Tim.
 
FWIW I used Tim's template. It took me 3 months to get version 1 done including all the research. For me the most important part was "knowing myself" which can be easily glossed over, because it's not the techie bit (if techie bits turn you on that is). In this area I went a great deal further than the template prescribes, if you like.

If I'm honest, it (the plan) was a pain in the ass to do, but was something that was absolutely necessary. For me what came out was:

1) What I need to do on the "me" side (still working on that one)
2) Identified trading training requirements (since undertaken)
3) Specific practical actions required to ensure that I have the practical wherewithal to trade to hand (almost done!)

Once you've been through the whole process once and hve a complete document, you are then in a position to condense the whole thing down to a very simple document on 1 side of A4 (A0 if you like posters!) - and I don't mean reduce the font size so that it fits either! Once you have done all of that, then you are some of the way there. My own view of course!
 
jimmy1jag said:
FWIW I used Tim's template. It took me 3 months to get version 1 done including all the research. For me the most important part was "knowing myself" which can be easily glossed over, because it's not the techie bit (if techie bits turn you on that is). In this area I went a great deal further than the template prescribes, if you like.

If I'm honest, it (the plan) was a pain in the ass to do, but was something that was absolutely necessary. For me what came out was:

1) What I need to do on the "me" side (still working on that one)
2) Identified trading training requirements (since undertaken)
3) Specific practical actions required to ensure that I have the practical wherewithal to trade to hand (almost done!)

Once you've been through the whole process once and hve a complete document, you are then in a position to condense the whole thing down to a very simple document on 1 side of A4 (A0 if you like posters!) - and I don't mean reduce the font size so that it fits either! Once you have done all of that, then you are some of the way there. My own view of course!


Good for you, Jimmy. Sounds like you're well on the road to becoming a winner.

--Db
 
Tim has done a great job, I personally use his template. I commited myself to write out each and every of his questions to develop and fine tune My Trading Plan.

If you are a beginner than you need the written-commitment ie 'Learning Plan' above it and to get yourself condition to the markets and overcome the emotions what the markets put you through you need the 'Psychology Plan' too ie to know yourself as a trader. So make sure to include these factors too.

Now put yourself through the live one contract trading. Learn more about your set system and when you become an extention to execute your system consistently and timely than consider Phase I of your trading career set. And you can't achieve this without keeping a Trading Journal And Realistic Targets & Rewards.

One tip: Not only read your plan & methodology but study it too and keep it current do not ignore it.

Remember: Markets only rewards Consistence actions AND Consistency breeds Confidence and Control.

Many thanks to Tim for making & collating this Template.
 
jimmy1jag said:
For me the most important part was "knowing myself" which can be easily glossed over, because it's not the techie bit (if techie bits turn you on that is).

I posted the text below on a different thread but thought someone might be interested to have look at the process I personally went through:


This seems like a reasonable place to post something about knowing yourself.- a bit off topic (US day trading) I know but relevant here. In addition to all the advice posted above, you need to know yourself. If you don't know yourself, then you can't take steps to improve. To get to know and understand myself I used and adapted an exercise when I was defining my trading plan last year. I originally did this exercise a while back in completely different circumstances. I dug it out and adapted it for trding purposes.

Below are the questions I asked myself (which I then answered in written form). This takes a while to complete, but if you've never worked on yourself before is well worth the effort.

Once you've completed the self inventory, you then need to identify you key weaknesses so that you can work on them in a structured manner. I am not a shrink or a psychotherapist; I take things which I find help me. What I did helped me and it may help you too, hence my reason for posting. (For obvious reasons I have deleted my own answers as they are highly personal). You can only do this if you can admit that you've got some problems in your trading. This helps you to identify where they lie. If, however, you don't have any psychological issues, then you don't need to bother with all this.

False Pride

Being so thick skinned that we have trouble admitting any human weakness at all. Another word for this is grandiosity. How would you describe yourself in this respect?


Humility

Humility means accepting ourselves, strengths as well as weaknesses; not being defensive. How capable are you of doing this- both in general and in relation to your trading?


Perfectionism

Setting unrealistic standards for ourselves. This can lead to impatience which can lead to frustration and ultimately (costly) mistakes. Are you a perfectionist? Do you set unachievable targets for yourself? How does perfectionism affect your trading?


Admitting Mistakes

Can you think of instances of being in the wrong and admitting it? Is it OK to make mistakes?


Impatience

When impatience gets the better of us, not only do we want what we want, but we want it now. This leads to us not trading our plan and subsequent losses. This can turn into a vicious circle as we become even more impatient as a result of the previous failure. How do you see yourself in this respect?


Resentment

Resentful people hang on to angry feelings. Resentment is a good excuse for irresponsible behaviour. Do you honestly feel that this resentment is justified? Do you feel resentment towards the markets for example? Or towards other traders because they do better than you do?


Understanding

Are you able to accept the things that you cannot change? Does this form part of the way you trade? This is also very much linked to “hope”. How do you trade when faced with the inevitable? Do you carry on regardless “because you know better”?


Being Honest

Are you able to be open and honest with yourself? Does this bring a sense of relief and a kind of calm? Or if not, why not?

Dishonest Thinking

When you are dishonest with yourself, you lose contact with reality. This results in believing that which you want to believe. What effect has this had on you and your trading?

Putting Things Off

Often we put things off until it becomes critical that we do something, and until everything is just right. This can lead to impatience and irresponsibility. What sorts of tasks have you put off in the past/ still put off? What effect has this had on your trading? If you had done these things how would things be different now?

Guilt

Sometimes we hang on to bad feelings about ourselves in the same way as we hold onto resentments about other people. This again can become a vicious circle and can affect our trading.

Fear

Sometimes we are afraid of specific things, afraid that a plan won’t succeed, afraid that we’re going to fail, and of the results that actions we have taken might have, for example, on our account. Describe the fears you have right now/ when you trade, the fears that destroy your peace of mind.

Acceptance and Greed

As acceptance of ourselves grows, so does our acceptance of the world around us. We don’t have to be fearful and defensive because if you’re doing what you’re supposed to be doing, there’s not much to worry about. You can only take what the market offers you. Are you able to let go when things don’t go according to your plan? Or when things go right for a while and then start to go against the way you planned? Describe how you feel in such situations.

Taking Things for Granted

Many of us tend to take things for granted when they are going well. We sometimes forget the effort, action and discipline which finally straightened things out for ourselves. Complacency and boredom are real dangers. Can you recall instances when complacency or boredom caused you to trade irresponsibly? To slip back into trading without your plan?


Being Grateful

How do you feel about how you are now? Do you feel gratitude towards those who helped you on your way? Can you see how a feeling of gratitude can help you in a positive way? And help you avoid the pitfalls of complacency and boredom?

The above questions are just a guide. There well may be others which aren't included here, but are just as relevant. Don't be restricted by the above.

Once you've answered these questions, if you can, go through them with someone you know, ideally your mentor (if you're lucky enough to have one) by reading them out aloud. Read through your original answers every now and again and see if things have changed.

I hope this is of use to someone.
 
frugi said:
"Seek freedom and become captive of your desires. Seek discipline and find your liberty." --Frank Herbert)
Hi Frugi,
I haven't visited this thread in yonks and came across your post which both surprised and delighted me. Surprised because it is old and I hadn't read it before (more on this in a mo'). Delighted because it's an excellent post and my vastly inflated ego was chirping away in the background saying b******s like "he wouldn't have posted this but for the template" etc, etc. . . Anyway, please forgive my rudeness in not directly quoting you, but Mr. Herbert instead. Wise words indeed. Having read your post, I was struck by a sense of deja vu, because I'm sure that I'd read Sandpiper's post which follows yours. :rolleyes: My acknowledgement in post No. 41appears to confirm this! Anyway, I've moved on since January (haven't we all) and, maybe, your post resonates more with me now than it did then for some reason.

At one point you urge me to open a journal; something that dbp has been especially keen for me to do for a long time. (Not just me obviously, but any serious 'wannabe' traders). I'm not especially interested or influenced by astrology but, that said, I am a Sagitarian. One of the characteristics of Sagi's is to fire off arrows hither and thither. These can lead to many exciting avenues that others never discover or, often as not, they can lead to a cul-de-sac! Viz a viz trading, more the latter than the former - sadly! Well, in some respects, I question my Sagitarian instincts and only go down a particular path if I'm reasonably convinced in advance - or very early on - of the merits of the particular route in question. With regard to journals on a BB like this one, it takes a particular kind of person to open and maintain one - and benefit from it. I would only ever seriously entertain the idea if I could understand precisely why I was doing it and what I and others would gain from doing so. So far, this has not been explained to me to my satisfaction.

In writing the Trading Plan Template, I attempted to provide a clear structure with sound reasoning that most people could follow. A 'step by step' approach. In theory, anyone who skim reads it - let alone completes it - will understand the purpose and value of having a trading plan. That was the objective, it is for others to decide how successful it is. For me, the same applies to journals. I'm sure all of us have folders on our PC's (Mac's) with notes, charts and pithy quotes from BB's etc. But this is a far cry from leaping into the dark unknown of an online trading journal on a BB devoted to trading with 50,000+ members like this one! That said, I take my hat off to those that make that leap.
Thanks again for your excellent post,
Tim.
 
Last edited:
timsk said:
In writing the Trading Plan Template, I attempted to provide a clear structure with sound reasoning that most people could follow. A 'step by step' approach. In theory, anyone who skim reads it - let alone completes it - will understand the purpose and value of having a trading plan. That was the objective.
Tim.

Hi Tim
Thank you so much for putting in the time and effort to write this excellent article. It is of immense help to me, giving me purpose and structure in my own efforts.

Any chance of a follow up with a journals template:cheesy:

Thanks

Don
 
don_h said:
Hi Tim
Thank you so much for putting in the time and effort to write this excellent article. It is of immense help to me, giving me purpose and structure in my own efforts.

Any chance of a follow up with a journals template:cheesy:

Thanks

Don
Hi Don,
Thanks for the kind words; I'm glad folks are still finding the template useful. As for a journals template, I think that's more dbp's territory than it is mine! In the meantime, this may be of help if you haven't already come across it. FWIW, all articles by Brett Steenbarger are well worth reading, IMO.
http://www.trade2win.com/knowledge/...rticles/making-trading-journals-work-for-you/
Cheers,
Tim.
 
A real good piece of work Tim. Thank you so much. It was a very good excercise in forcing out the tough answers about my trading style and myself.

I really appreciate your valuable contribution in writing this template.... :)
 
Trading Plan

I see all the messages about the Trading Plan,
but can some one direct me to the place
where I can download this Plan.

Thanks
 
Thank you Tim for such an excellent result of the task you set yourself back in 2004/5. I am grateful for your invaluable Template, since it has become the sole source for the construction of my own plan. Furthermore, I appreciate your degree of detail which I am now determined to abide by. In particular I should like to emphasise the value I found in Sections 1, 2, 3, 5, 6, 14 & 15. Congratulations & a wish for your continued inspiring gardening !.
 
Has the template been updated?
Hi TRO,
No - not yet, not by me anyway!
It's now 4 years old and it's high time that it was updated and, as the author of the original text, I guess I'd be the obvious person to do it. In principle, I'm happy to do this if members want it but, in order to do a half reasonable job, I'd like to canvass opinion from the membership as to what needs updating! The original document was a collaborative effort, based on members offering their views as to what needed to be addressed by the template. If peeps want to repeat this process and offer constructive comments as to how the template could be improved, that will give me something to work with when the time comes.
Tim.
 
What great work!!!! Can I link it to my web pages? I think it is great as a lot of my clients are beginners and although I give them power point presentation when they join and phone them to train them personally, your work is totally focused and to the point.
Let me know if I can use it.
Thank you.
 
Thank you for sharing this incredibly comprehensive document. I've struggled for years and procrastinated to create my trading plan - not knowing where to begin and uncertain about what to include or exclude. I'm grateful for your gift.
 
Great article Tim. Here's my attempt at following your guide (in 2 parts because the T2W blog wouldn't let me post it as 1 entry): Part 1 - http://www.trade2win.com/boards/blogs/fishhero/5470-trading-plan-part-1.html

Part 2 - http://www.trade2win.com/boards/blogs/fishhero/5472-trading-plan-part-2.html

Any feedback would be much appreciated :)
 
Top