Educating Tomorrow's Trader..... Today!

Sample Trading Plan

Below is a sample trading plan that you can use as an example and a guide to developing your own. It is your
business plan for your trading business. It should be written as a letter to yourself, as a promise that you will
keep no matter what. Your plan may be changed and updated from day to day, but NEVER stray from your
plan intra day. You must wait until after market to change your plan, then follow the new plan the next day.
You may need to adjust the numbers based on your account size, the numbers used here for maximum
lot sizes would max out a $35,000 margined account. Use this as your guide and for ideas to formulate
your ideal Trading Plan...
Notice: This is a sample only. It should not be used by you in your trading. It should only be a guide to
be used to develop your own plan. If you are a beginner trader you should paper trade first, then move
up to 100 shares, then 300, 500, etc. until reaching the maximum numbers that would be outlined on a
plan like this. You only move from paper trading to increasing lot sizes when you have proved yourself
successful at each level of shares.
OBJECTIVE
To consistently make 1 - 2 points per day, keeping my batting average above 55% and my sharp ratio over
1.8. Based on the share size below, this should translate to $1000-2000 per day on winning days, with the
ability to let some days grow beyond that based on money management techniques outlined below. I
want to keep winning days at 80% or greater.
I. Share Size Lots
A. Below are what I consider to be my
maximum shares I will trade under
optimum conditions (my full 'lot').

D. Half lots will be used for entering positions half at a

time OR for share sizing trades that are worthy but
riskier for some reason.

B. This is the maximum I feel safe trading

based only on my account size.

E.

C. I will trade the LESSER of the sizes

listed below, or the size determined in
II, A, 2.., below, describing max loss per
trade.

Share Price
$100 - 130
$70-99
$50-69
$35-49
$20-34
$12-19
$5-11
$3-5

Full Lot Size

500
700
00
1000
10
1400
140
2000
00
2500
3000
4000

Half Lot Size

300
400
500
700
1000
1300
1500
2000

Educating Tomorrow's Trader..... Today!

II. Money Management

A. Maximum Loss Per Day

B. Trail Stopping the Profits

1. On any given day I will not lose more than

$1000.00. If my last trade puts me over this
amount I promise myself that I will shut off Real
Tick, walk away from the computer and return
only to evaluate my trades, print charts, and
listen to the PMTR, with Real Tick off.

1.

Since my goal in money terms is

$1000, at any time on any day that I
reach half that goal, $500, I will
enforce a 'break even' stop on the
day, ensuring that a winning day
does not turn into a loser.

2. On any given trade I will not lose more than

$400. To accomplish this I calculate my share size
on any trade by dividing 400 by the stop loss of
the proposed trade as dictated by the chart. I will
never change the stop loss as that would violate
the integrity of the play. The number of shares
traded will be the smaller of this calculation and
I, C, above. For example, a 51 dollar stock has a
play possible with a stop .5 away from entry. A
$51 stock has a maximum size of 1000 based on
my full lot size above. However, the .5 stop would
be a loss of $500 which is above my $400 per
trade loss limit. Since 800 shares would be the
share size needed to limit my loss to $500, I
would need to play 800 shares, which would be
the lesser of 1000 or 800 shares.

2.

Once my goal of $1000 is reached, I

will immediately enforce a $500
profit stop to ensure that once my
goal is reached, I will keep at least
half of my daily goal.

3.

Once I reach $1500, I will raise my

stop on the day to $1000 to ensure
that once I have exceeded my daily
goal, I will at least keep all of my
daily goal.

4.

From that point forward, I will

enforce a 60% trailing stop on my
profits, saving $1200 after reaching
$2000, etc.

III. Strategies and Times to Play

A. I will play the following strategies as they arise on good quality set ups with full lots, or the max
allowed based on my per trade loss limit using the given stops:
1. A gap down (up) to support (resistance) in a stock when the market is gapping down (up) as
well or is opening up (down) less than 20 Nas points. Support (resistance) must be found in
both a major moving average (see resource page for major moving averages) and either a trend
line or horizontal price support. If one of the above requirements is missing I may play with a
half lot. I will buy the stock over the 5 minute high, which may be adjusted down to as little as
a one minute high. The play must take place before 9.45. I will sell half of the shares into
reversal time and use a break even stop on the rest, and will have the option of selling all into
reversal time depending on the quality of the play. If I sell all I will reserve the right to
repurchase half on the reversal time pullback. Stop loss on these plays is the 5 minute low,
which is also the low of the day.

Educating Tomorrow's Trader..... Today!

III. Strategies and Times to Play

3. I will play one over (under) 30 minute high (low) on a gapped up (down) stock. I will sell half
this play at approximately a 1.5 % gain, keeping the back half for the day. The exact target on
the first half will be dictated first by the chart. I may do a second play if I have successfully sold
half of the first play. The stop will be the low of the pull back that happened prior to the break
out. If this is greater than 2% of the stock price, half lot or pass the trade.
4. I will look for late day basing stocks with a base width of less than 1% of the stock price. I will
play these stocks only after 3:00 unless there has been a strong one direction move in the
morning and one strong counter move all during lunch. I will anticipate these long if the
futures are in an uptrend for the day on a 15 minute chart and above their 200-15, and the
TRIN-Q is below 1.2. I will anticipate short if the reverse is true. My stop will be the other side
of the base and I will sell half for scalp profits and keep half for the end of the day.
5. I will play Reversal Day stocks exactly per the entry rules, on 5 minute highs (lows) for Novice
and Pro Gaps, or on a high volume break out from an intra day base if no gap or on the 30
minute highs (lows) if no gap. The daily chart must show above average volume on the average
of the last two days down (up). Total days down (up) must be at least 3 clean bars. Stock must
be at or played at a support (resistance) area on the chart, either a horizontal support,
trendline, or moving average. First half target will be determined by the chart and half will be
held for the day. Stop is low (high) of the day.
6. All other set ups and trading room calls I will treat as scalps, going for 200 dollar targets in
each case, and stops that are no greater than the profit potential.
IV. Continuing Education and Days Off
1. I will take a half day off every week, and a full day off any week in which I accomplish my goal
3 day in a row.
2. I will take a day off any time I have 3 losing days in a row, even if they were not maximum loss days.
3. I recognize that good traders never stop learning. I will continue my education in the following
ways on the following schedule.
Books...
Seminars...
Mentorships...
Web Research...
Self Improvement tapes or courses (non-trading)...