By Guest Contributor, Michele Hurlbut
Why We All Need a Trade Plan
Good Day All!
I am here today to talk about Trade Plans. I know, groan…. But remember, Trade plans are one of the most important steps to any trading career.
Every business has a Business Plan and our business of trading should be no different. You wouldn’t go back to your favorite hamburger joint if they didn’t have a plan to build your burger properly so you could eat it.
Just as it is important for a business to have their plan, it is equally important that we each build a Trade Plan of our own.
Make Your Plan
It’s wonderful that Hawkeye has so many videos to learn from. And I have been learning and working on the 3-Step Entry Method these past couple months.
Now that I am feeling more sure of myself and I have worked with this method, I see myself putting my own small spin on it. I have learned over and over that you can teach somebody to do just about anything but until they put their own ‘words’ to it, they will not be able to fully internalize it.
The information on the Hawkeye website is a great starting point. You still have to learn how the execution works best for you and the way you see and analyze the markets.
Trade Your Plan
By nature, I am a contrarian and so I tend to be a counter-trader (one of the main reasons I came to Hawkeye was to learn to be a trend trader.) Trading with the trend did not feel right to me. I have this constant doubt that ‘the trend will continue’ after I enter. Practicing the 3-Step Entry has gone a long way in taking this doubt away. It has also given me a structured entry and exit plan that I was able to practice and learn how I see the markets.
Randy from Hawkeye has a saying ‘Trade your Plan, or plan to fail.” Benjamin Franklin liked to say “Failing to plan is planning to fail.” Two very wise men!
So, while I know the entry criteria from the videos and website, it is time for me to write out MY plan the way I see it. In doing this, it solidifies and gives me a document, a job description, of what is expected of me while I run my trading business.
My Trade Plan
The general outline of my Trade Plan is as follows:
Mission Statement: Why do I want to be a trader?
I think it’s a good question to ask yourself. Not everyone has the same reason for wanting to be a trader.
Name of the Trade I will be describing.
Each type of trade should have it’s own name. (i.e. 3-Step Entry, Counter-Trend Confluence, etc.) This section is where I further describe the rules for my entry in detail. Don’t leave anything out. It is important to be very clear about what your entry looks like. As we have all learned, there are plenty of trades that come along that look [a lot] like your entry but not quite and when we take these tricksters, the trade fails more than it works.
Remember the burger joint, what if they gave a general ‘make a burger’ statement but didn’t say how. You might end up with dressing on the outside of your bun instead of the inside, or maybe your patty would be the base instead of a bun. Sounds like messy hands to me….. I know it sounds silly and that everyone knows ‘how to make a burger’ but they didn’t always. Burgers were invented by someone at some point in time and that person had to teach others how.
Every trade plan should have goals that can be broken down into steps that feel like they can be accomplished. Maybe you take a big goal and break it down into many small steps. Make sure the goals are specific so you know if you are on track. It’s great when they have due dates but it is not imperative.
That is the general outline for my Trading Plan. Now it’s time for me to get it all on paper and then implement it.
What good is a Trade Plan if we don’t follow it??!!
Great trading everyone and speak with you again soon.
Join Randy in the next free LIVE Hawkeye Demonstration Room held every Wednesday at 9.30am EST US. You will learn more about volume and volume price analysis and see more examples and live trade setups. It is open to all.
Click this link for more information or to join us in class.
Learn to trade the Hawkeye way.
Hawkeye Traders, LLC