TIME to create a business plan!!!
Day trading is not the way to have continuious, steady, repeatable wins. Day trading is gambling with an edge, at best, if your good at it.
Example of a business plan.
Was making $60k, now making 60% or $36K unemployment difference $24k, $500 a week. Medical insurance $300 a week. $15.5k yearly.
Want $24k yearly, $2k monthly, $500 weekly. Need $15.5k yearly, $1.2k monthly, $300 weekly.
Cash to trade with $3k! Trade 3 stocks a week $1k each. For each win, exceptable loss is 1/2 the wanted gain.
To reach $500 with all winners I need 17% on $3k weekly, or 5.5% each stock trade.
To reach $300 with all winners I need 10% on $3k weekly, or 3% each stock trade.
Goal 2 out of 3 trades winners. 17% + 8.5% to cover 1 loss = 25.5% on 2 trades. Each needs to be 12.5% for $500 weekly
Goal 2 out of 3 trade winners. 10% + 5% to cover 1 loss = 15% on 2 trades. Each needs to be 7.5% for $300 weekly.
So your want goal is 2 winners a week @ 12.5% each. Your need goal is 2 winners a week @ 7.5% each.
Looking for trades which will give 10% average gains on a weekly trade. Search for chart patterns with 10% to 15% gain targets.
You should have at least 2 times what you will be playing on strong watch. If playing 3, you need at least 6 strong watch stocks a week. to hope to get 3 give entry signals.
The more the better.
So theres the basics of a trading business plan.
Want goal $24k a year, Need goal $15.5k a year. Trading 3 stocks weekly for 7.5 to 12.5% gains, on 2 out of 3 trades. With chart patterns projecting 10 to 15% gains. Each time a strong watch stock signals entry, you buy and sell at goal or 1/2 the goal for an exceptable loss.
All that is needed, is finding 6 to 9 strong watch stocks each weekend, that project 10 to 15% gains and trade the plan. Remember to always have an exceptable loss 1/2 the expected gain and sell when either is hit. If neither is reached in the week, sell at the Friday close price and start new each week.
Monthly, evaluate where you are and adjust as needed, to make up differences in the monthly goals attained. You should be able to find 10 to 15% gain stocks in the $5 to $15 dollar range. That means you can scan for chart patterns using FINVIZ.com. And rely strongly on TA entry signals, because your playing the big boards.
Evaluate this example and plug in your needs & wants, capital available, time frame needed for cash income. Maybe you will want to trade on 2 week cycles, or trade for monthly goals.
At any rate, make a plan, run the numbers, know what you need to do to hit goals. And set them. Work each weekend to find prospects. Create a chart plan for every strong watch stock and trade the plan. Evaluate and adjust.
Being sucessful in trading is all in the numbers. Knowing chart patterns and executing on TA signals, for entry. The key to any plan is keeping the win/loss ratio in your favor. The better you become at finding winners, which reach target, the larger you can make your ratio. I use an exceptable loss 1/2 my gain target. If you have less success then 2 out of 3 winners, change this ratio and play more then 3 stocks. Say play 4 stock, dividing $3k up and have a loss 1/4 the gain. Keep the odds in your favor.
With 1/2 you need to lose 2 times, for each win, to break even. This works well for me. But I'm farely good at picking chart patterns. You may need to take smaller losses and play more stocks. If you have trouble generating at least 1 win out of 3, to stay even for the week.
See my point. Keeping your cash, is as important as getting gains! You need the capital to continue. It's hard to come back from large losses, with small amounts of cash to start. Capital preservation is very important. And if you need to trade in and out frequently, because your exceptable loss ratio is small, so be it. Use 1/4 or 1/3 or event 1/8 if needed. But don't except large losses with small amounts of cash to start.
Forget about what you miss!!!!! You business plan tells you what is needed and what is wanted. Be happy (very happy) if you get that! Need help with your strong watch list? Bring it to the board for comments.
Make a plan. Ask for help with strong watch list.
Success!
