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Steady Trade Podcast Episode 5: Building a Trade Plan (And Sticking To It)
Trading can feel like a jungle sometimes. As a trader, it can frequently feel as if you’re fending for yourself alone in the wilderness, without guidance, training, or a proper map. There are all sorts of pitfalls, dangers, and even lions (OK, maybe not actual lions) that you might encounter, and so part of your job as a trader becomes navigating the uncharted territory, remaining vigilant and above all, remaining safe. But simply surviving isn’t going to make you a millionaire. So the question becomes this: how do you not only survive, but thrive as a day trader?
As Episode 5 reveals, what you really need to take your trading to the next level is a trading plan. In the episode, your co-hosts Tim Bohen and Stephen Johnson will talk about the importance of having a trading plan, starting with what a trading plan actually is and then expanding on how to create an effective plan and (this part’s important) how to actually stick with it for long-term success.
Do you need a plan?
There’s no spoiler here: yes, you need a plan if you want to begin to find reliable success as a trader. Trouble is, few day traders find planning sexy.
In Episode 4, Tim and Stephen discussed plenty of sexy stuff: hot stocks, news, and catalysts. This is the type of stuff that can get traders all hot and bothered. While these factors can certainly help in choosing the best stocks to trade, this type of analysis must be combined with a clear-cut plan to deliver the most reliable results over time.
Planning: the key to long term trading success
As Stephen says, “if you believe it, it’s going to come true”. He trusts his gut and believes you’ll come out with the winning trade. Unfortunately, Stephen isn’t a profitable trader yet.
Tim, the man with the plan (and years of successful trading under his belt), disagrees. As he argues, trading isn’t the book The Secret. Hoping and wishing and faith are not bad things, but he prefers a slightly more analytical approach to deliver results.
In essence, establishing a trading plan is the way in which to harness the sexy parts of trading and create a roadmap for yourself so that you can have a clear cut plan of attack and an exit strategy for your trade. It helps you go from “hold and hope” to reliable action.
If you don’t have a plan, you’re basically gambling. This can help you win here and there, but over time, your losses will exceed your gains, you’ll become frustrated, and move on. Planning is the way that you can create a career as a trader that will span years, not just weeks or months.
How to make a plan.
As the episode progresses, Tim and Stephen get down to brass tacks and talk specifically about the process of making a trading plan.
As Tim reveals, while it may sound like a downer, it’s important to focus on risk first. Trading isn’t a lottery, and you don’t want to gamble, and therefore it’s important to control your risk.
Tim goes on to guide you through the process of taking your scanning of the stock charts (discussed in Episode 3) to the next level by hatching a plan based on your findings that can help you make educated decisions and controlled risks. You need to ask yourself questions like these: where is my stop loss? When will I exit this trade if this stock doesn’t begin to perform how I want?
By taking this more approach, you can begin to find ways to be reliably and consistently profitable. The fact is, there are many factors that you cannot control in trading, but you can control when to pull out and how to control your losses. Therefore, this should be at the center of your planning process.
From here, Tim and Stephen discuss the best way to build your plan around your risk so that you can proactively go after stocks.
The long term benefits of planning
Throughout the show, you’ll see that an incredible change comes over the newbie trader, Stephen. As resistant as he is to planning from the get go, he realizes as the show goes on that basically, he’s been “running”–trying to catch up to the stocks. Tim offers a way to change your relationship with trading, making yourself a calculated hunter rather than just chasing the most shiny and sexy stocks. Once you’ve finished listening to this episode, you’ll have a much greater understanding of the benefits of planning and have plenty of ideas for how to create your own trading plan.
Win big!
To celebrate the first season of the Steady Trade Podcast, we’re offering some incredible giveaways. Check out the giveaway page here, and stay tuned for future episodes for more information on how to specifically look at, understand, and monitor stock charts.
Thanks for another great episode. Best podcast on trading in the world!
ha so nice of you cheers!
Enjoy the video to this episode, love you guys, thank you for taking your time to do steady trade podcasts!
Thank you man for listening – appreciate that!
Steve stick to your plan for Halloween. Hope you do more podcasts.
hahahahahah we just recorded some of this you’ll see 🙂
The 29:00 analogy part hits right on the head!!!! Last month, I was trading a lot of different setups, like a total newbie, even though paper trading, I traded like a junkie going in without a plan and was like Stephen, just believing. But this month, I’ve had 14 losing trades and 6 winning trades. To my surprise, my winning trades are more than my losing trades as I only traded what I understood, researched a lot and ultimately, planned those trades. One thing that I think needs to be emphasized on is that always have a target price, if not you’ll just try to go for the top and that has never once worked out for me. Great job improving not only the podcast itself but also the website!!!!! Appreciate it!!!
Very cool comment we may just feature this in an upcoming recording 😉
Tomorrow is the day! Can’t wait!!!
ha ya hope you enjoyed
Loved the video episode. I really appreciate all your efforts in educating us new wannabe day traders. I am 58 and it has really been hard to find a job after I lost mine in May after 10 years with a company. I am sick and tired of working for someone else and it is time to be my own boss. I believe if I follow the rules and study hard, I will be successful with this and can do this for a living.
it was nice to heard about building a plan before entering in the trade and stick with it , if anything goes against you CUT LOSSES QUICKLY that’s the strategy ..!!
Great pod cast. Understanding more.and.more.
Thanks gents.
I cannot believe the timing of this podcast. My niece is in the “Millionaire Challenge Program” and I am in the “Millionaire Masters Program,” and yesterday we talked about what stock would we trade and they whys and our entry/exit targets. So your podcast today has definitely helped me to refine my plan, so thanks. Loved the analogy of the lion and Stephen just running off and Tim making a plan. Eventually Stephen you would get tired and the lion would get you, but Tim making a plan has a better chance of getting away that time and again and again. So Stephen learn the old adage, “Fail to plan, plan to fail.” You two guys are great and thanks for taking the time out of your busy lives for doing these podcasts They have helped me so much. One thing I would like explained to me is the “first” red day to short. Lot of questions on that just because I believe I will be a better short trader than long.
So beneficial and better understanding for me but leaves me eager for more. Looking forward to season 2.
Greedy little bastard/ greedy bitch 🙂
Great rundown of creating a daily plan!!! Thanks guys!!!
I studied this morning and missed all of the action. I was really tempted to complete a trade at the end of the day but kept my emotions in check and didn’t “trade just to trade” even though there were some hot stocks.
WOW audio and video great podcast guys …one of the best ones yet, I keep learning new ideas every Monday…love the show..I drive over a hour to and from work so I will be listening to this one over again…Great job .and thank you.
Writing losses in a diary and pinning index cards with trading plans on to my monitor are things I’m definitely going to do! So much useful information as always and I love how “a lot of trading is not trading”. Thanks guys and looking forward to tomorrow! Will the episode be streamed live on the site?
Stick to the plan, stick to the plan, stick to the plan. Aaaargh! why is that so hard?! A forest walk will give me the peace and quiet to receive that answer from the universe. Thanks guys for this useful podcast yet again.
This goes in a great direction, leading us newbies into the forest of trading and showing us the right path. Where we go from there is up to us… Thanks to Tim & Stephen for the great overviews!
Wow, another great episode! Soo much clearer and straight forward!! I loved the video and the analogies. I loved the sound of the lion, especially. I’ve been watching Tim’s trader checklist and HTMM which is discusses a lot of the information mentioned here and I loved the continuity. Thank you for bringing this to us.
Very good.
Thank for another episode, always has a Plan,now i got it a lot of trading is not trading.
Can we call this is a trade plan? follow intraday stock directions trade according to that directions….
Great video, “THE PLAN” is something I need to work better on but most importantly, the execution. I tend to have a “half plan”, very similar to what Stephen does. I look at top % gainers, the catalysts/news, its float, the volume and the main pattern I know, but almost always once I enter a trade and get executed one of the two happens. 1.) I freeze and just forget about my plan even though my notes are in front of me and the lines I drew in the chart are in front of me and/or 2.) a rush of emotions/adrenaline comes through and I just panic and usually end up taking a loss by exiting too early or exiting too late. How do I get over this hump?!?!?!!?
Secondly, and more importantly for me. How do I execute my plan better?!? I usually have a good plan but do not have great execution because of what I mentioned in 1.) and 2.).
Tim Bohen ” If you dont plan at all you plan to fail ”
Logic plan set risk!
WHere is your stop loss ? got me
Review History
Avoid mid day trading 11pm -2pm
Pick meee!!!
So cool! This so much applies to me: believing to Universe and sending positive energy like Steven sometimes. I used to write plans for 5 months, however it didn’t help me to become consistently profitable and I felt like “why I need this plan, better to jump into the trade as many of others and profit as they do”… And I came to the losses ) So, I started writing the plans again and trade in Paper Trading. It gave me confidence in my plans as I earned 8K in 2 months. Now gonna switch back to the real money. Thank you for the great video!
Howay the lads. Great podcast chaps. Very interesting.
Awesome podcast, I’m new to trading and I can see why I should avoid mid day trading. It has got me no where ! Lol thank you for the eduction !
Thanks Yaser! Glad you found it helpful!
Used a plan yesterday and had 3 postive trades . Not huge but positive . Thanks guys !
Thanks Guys, another great podcast, (Now in Sound and Vision!). This was my weakest area coming into the Millionaire Challenge, but I’m working hard to address it. I am making plans each day, but I’m still overwhelmed by the number of stocks that my scanners produce. Maybe it’s just an unusually high volume of plays we are currently experiencing, but it does make it difficult to home in on the right stock and I find myself missing great plays having settled on something mediocre. I’m still at the start of my journey so I’m sure I will get better. Anyway, really enjoyed the podcast and lets hope that Stephen can ‘Stick to the plan!’. Cheers.
Great Podcasts Guys. I am working on a plan now and I will write it down and keep to it.
Thanks for the inspiration.
Thanks again boys, just realized how lazy I have become, and really how important the plan is.
Thank you!!!
Really loving the podcasts and the content!! The examples you give and the way you explain things really helps me to understand and make the content stick. Looking forward to Season 2 – you guys are awesome! Thanks so much!!
Thank you so much guys for putting this podcast together each week! Each podcast has been extremely helpful.
Thank you for listening Robert!
Great to hear stephen making a secret life trade plan. If you believe in it (trade plan) and really really believe in it, you will be successful.
Aweesommme!
Looking forward to Season 2!
Makes complete sense. Have a plan and sticking to it.
The challenge is “Will you stick to it OR some other greed will change your mind and you end up in a losing trade in the end?
Learning something everyday.