Your daily stop loss is ~10% of your account equity?! Isn't they typical rule if you're down 6% for the month to stop trading for the rest of the month? Not 10% in one day.
You must add a papertrading plan in there and trade your discretionary system until you are comfy with it. I honestly don't know any successful discretionary trader out there so you must find a couple of setups and papertrade them first to build your edge. Not to mention, your system must work on all market types...choppy and trending. Starting the way you are will sure lead to a high drawdown which can be somewhat avoided by papertrading. Moreover...your plan is lacking serious juice. Your money management rules are vague, your strategy is inexistent, your costs of doing business isn't there....Where is your post-market routine? I start my work aftermarket and I am a scalper. Overall it's a good start but there is a lot more to be added there. Don't be discoraged by the criticism. Your plan will save you some money, papertrading will save you some more, an edge will give you confidence and hard work will lead you the right path...assumming you do follow the rules of the game. Best of luck....keep us updated on your progress.
Busy trading of course!! I'm going to update my the profits I make for the day weekly because it's easier for me. I'm too busy during the week to post, because I have too many things to do during the trading week. I made some adjustments to my trading plan as well as my money management plan. Updates to follow.
Any suggestions or questions appreciated. Revised Trading Plan. 1. Questions Regarding My Purpose and Myself: Why do want to be a trader? I want to be a trader because I am excited by the challenge to be successful in a discipline that is notoriously difficult and where, allegedly, 90% of participants fail. My primary objective in wanting to be a trader is to generate sufficient annual income of at least $500,000-$1,000,000 in order to support the type of lifestyle I want to live. My secondary objective is to spend more time with my friends and family and enjoy the freedom of being able to be my own boss. These objectives are important to me because they provide purpose and direction to my life and enable me to lead a more balanced one. I believe I can achieve my objectives because I am extremely motivated and persistent. What Sort of Trader are You? Iâm a day-trader. I understand that I cannot predict the future and I accept that I cannot control the markets. However I can control myself, which I will do by adhering strictly to my trading plan that is detailed, specific, tested and profitable. What are Your Strengths and Weaknesses? My primary strength is allowing my profits to run. This contributes to âmy edgeâ and helps me towards my goal of being consistently profitable in the markets. My primary weakness is overtrading and chasing. The following aspect of my trading plan will help to control this weakness and prevent losses from spiraling out of control. I have a pre-defined daily stop. If it is hit, I stop trading for the day. Are You in the Right Frame of Mind to Trade? I will only trade on days when I am rested, relaxed and not distracted by work or family etc. I will be guided by my trading plan and I will adhere to it rigidly. It will help to prevent me from making trades that are poorly conceived and executed; i.e. trades that are based on gut feeing and motivated by fear and/or greed. I will not trade on days when I am feeling off, hung over, particularly tired or when I am mentally distracted by other events in my life. 2. Questions Regarding Trading Goals: What are Your Annual Trading Goals? My annual trading goal is to develop my trading âedgeâ in order to tip the balance of probabilities in my favor. At the moment, this comprises two separate elements, namely: 1. I model the best trading practices, including having a written, clearly laid out trading plan. 2. Read many books and magazine articles pertaining to trading and study the words of wisdom from the more experienced members of Elitetrader.com. What are Your Weekly Trading Goals? My weekly trading goal is to trade every day of the week in accordance with my trading plan. This will entail taking my stops instantly; sticking to my risk and money management strategies; following my exit criteria and devoting most of my time to searching for new trades and choosing only the very best setups. In addition, I will constantly revise my trading plan. When I achieve this goal I will pat myself on the back by hanging out with my friends. What are Your Daily Trading Goals? My daily trading goal is to trade according to my plan. Today I will stick to my plan because it is detailed, specific, tested and profitable. I am confident that I have the self-discipline to adhere to it, which, in turn, will ensure that my weekly, monthly and annual goals are met. I will look at the document, âTrading Rules with Indicatorsâ and stick to what it says in that document. In addition, I will have a journal handy to write what I feel during the day as I trade. I will also ask myself the following questions: 1. How did I do? 2. How am I feeling? 3. Why did I make this trade? 4. Is this trade in my trading plan? 5. What went right? 6. What went wrong? 3. Questions regarding Market and Instruments: Which Markets will You Trade? The instruments that I will trade are the U.S Market as well as the crude oil market. Which Instruments will You Trade? I will trade primarily trade SPY initially and then eventually shift towards the ES because I can incrementally increase the number of contracts I trade as my account grows without effecting the movement of the instrument (I donât have to worry about liquidity as I would with micro-cap stocks). In addition, I may choose to trade DIA, QQQQ, or USO when the SPY is in a tight trading range. 4. Questions Regarding What You Do Before the Market Opens: What is Your Daily Pre-market Routine? My daily pre-market routine comprises four key areas, namely: 1. To analyze and log yesterdayâs trades. 2. To review any open positions and update targets. 3. To assess todayâs market conditions and plan accordingly. 4. To plan the day ahead. Have You Analyzed Yesterdayâs Trades? Each day, I will ensure that yesterdayâs trades are analyzed and logged and that my trading journal is up to date. Additionally, I will check to ensure that I adhered to all aspects of my trading plan. What are the General Market Conditions? Before trading, I will check: 1. Index futures to see if they are flat, trending up/down or mixed. 2. To see if any key economic reports are due to be released and at what time â i.e. Michigan Sentiment, housing numbers, oil numbers, etc. 3. To see if any key personnel are due to make announcements / speeches and at what time â i.e. Bernanke addressing Congress, I aim to trade the market reaction to these reports and speeches. Therefore, I will not trade for the first 5 minutes following the speech / announcement and observe the reaction to it by the market. This will help to ensure that I trade what I see and not what I think. What are the ATR and the Key Price Levels for the Instrument? Everyday I will find out the key price levels for the SPY, DIA, QQQQ, and USO as well as their ATR because these are critical in helping me to establish trades on the right side of the market.
We are not greedy are we? Seriously, good luck. You will need it... BTW, Did you look up the answer to my question? Which was do you need 25K to day trade the ETFs?
I have a deal with a prop firm, which allows me to have a buying power of up to $200,000. I can purchase $200,000 worth of stock anytime. I want to have a Ferrarri before I'm 35 so I have to make the amount of income I desire. I've dreamt of having one of my since I was young.
Based on 20 trading days per month, 240 trading days per year... 4166.67 per day = 1,000,000.80 annual 2083.34 per day = 500,001.60 annual 1041.67 per day = 250,000.80 annual 416.67 per day = 100,000.80 annual 100.00 per day = 24,000 annual All figures are pre tax.
I might consider creating a hedge fund after I build a nice track record and save enough cash. Networking and skills I used as a stockbroker, might make that become a reality. With an average of 2% upfront fees and 20% fee incentive, it may make that goal even more attainable.