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Building a Trading Plan & Journaling your trades

Building a Trading Plan & Journaling your trades. February 27, 2014. Current Market Update. Since last meeting on 1/14/14: NASDAQ @ 4183 Market uptrend under pressure 1/13/14 Market in correction 1/29/14 Market in uptrend 2/11/14 Today NASDAQ @ 4318 (3.2% increase)

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Building a Trading Plan & Journaling your trades

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  1. Building a Trading Plan & Journaling your trades February 27, 2014

  2. Current Market Update • Since last meeting on 1/14/14: NASDAQ @ 4183 • Market uptrend under pressure 1/13/14 • Market in correction 1/29/14 • Market in uptrend 2/11/14 • Today NASDAQ @ 4318 (3.2% increase) • Distribution count: NASDAQ 2 and S&P500 1 • Best practice: Review Price and volume of market and leading stocks daily • Big Picture • Sector Leaders

  3. Building a trading plan • Why do it? • Build discipline and consistency • Become less emotional • Become a better investors

  4. Components of a Trading Plan • Entry rules • Exit rules • Money Management rules • Daily & weekly review plan • Trading Journal

  5. Components of a Trading Plan – Entry rules • Have a checklist • Examples • Investors.com • http://www.investors.com/images/editimg/ibded/C18G1-Buy Checklist.pdf • Stock Checkup list • Investors.com/radioshow • http://www.investors.com/images/editimg/ibded/GettingStarted_BuyingChecklist.pdf • How to Make Money in Stocks book

  6. Components of a Trading Plan - Exit Rules • Have a checklist • Examples • Investors.com • http://www.investors.com/images/editimg/ibded/C19G1-Sell%20Checklist.pdf • Investors.com/radioshow • http://www.investors.com/images/editimg/ibded/GettingStarted_SellingChecklist.pdf

  7. Components of a Trading Plan – Money Management • Number of stocks to own • Establishing Positions • 1st buy = 50% of total position • 2nd buy (up 2 to 2.5%) = 30% of total position • 3rdFinal buy (up 4 to 5%) = 20% of total position • Example $20,000.00 total position in stock • 1st buy = $10,000.00 • 2nd buy (up 2 to 2.5%) = $6,000.00 • 3rd buy (up 4 to 5%) = $4,000.00

  8. Components of a Trading Plan – Money Management • Incremental in and incremental out • Average UP, not down • Don’t’ chase a stock more than 5% past it’s pivot point • Every first purchase in equal dollar amount • Each additional purchase is smaller

  9. Putting it into Practice • Daily Routine • Weekly Routine

  10. Trade Journal • Why do it? • Improve as a trader • Learn from your mistakes • What to include in journal • Why bought? • Why sold? • Did I follow my rules?

  11. 2014 Goal Setting • Things to consider for your 2014 goals • Use your 2013 post-analysis to see what worked and what didn’t • What can you improve on? • Put it into practice • Why are you trading/investing? • Take 10 minutes to figure out why you want to be involved in stocks • (if you want it bad enough…you will achieve it) • discipline

  12. Other Stocks to review

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