Hello and welcome to another Simple Trading Ideas trading tutorial.

In this Simple Trading Ideas trading tutorial is a very basic introduction to trading plans. The trading plan is basically like a business plan. The trading plan is your roadmap to successful trading much like a business plan is a roadmap to running a successful business. We have all heard the saying that if you fail to plan then most likely you plan to fail.

The roadmap analogy of the trading plan brings to mind a recent cross-country trip that I had the privilege of taking. Thinking back, I could not imagine even leaving the house to go on that trip without having a map. Why is a map important? Because it is important to know where are was going and how you are going to get there. The point here is that I wanted the information about the trip prior to taking the trip. I wanted information organized and I wanted to feel comfortable about the direction I was going. I suppose I could just jump in the car and started driving West because I knew that was the general direction I wanted to go in. Can you imagine doing that?… not me, especially after having been on a long trip with a lot of places to get lost plenty of wrong turns along the way. If I hadn’t of had a map and hadn’t had a plan I would have been nervous the entire trip.

Now you may say that I could have just bolted from the house and jumped in the car. After I start my journey I could have just stopped and asked for directions periodically. Do you really think that would have been the most efficient way to get from point A to point B? I can already tell you that the answer is unequivocally no.

You have probably heard the saying that the greatest or longest or most magnificent journey begins with the first step. This is absolutely true. The first step should not be taken without a plan or else it may be in the incorrect direction or into some unforeseen pitfall.

Some beginners truly believe they can just wing it in trading and can shoot from the hip. Now it is true that you may very well be that type of person with that level of connection with the market. With that said, people with that type of connection are very, very rare. Why take the chance that you are not that type of person and simply construct a simple trading plan. Get your journey started off on the right foot,

Please keep in mind that creating a basic trading plan is not a monumental task. Don’t think for a moment that creating a trading plan akin to rocket science or particle physics. Creating a trading plan can be a lot easier than you think.

Here’s a method I use for creating simple trading plans. If ever happened to get bogged down I like to make it fun and make it simple all at the same time. Are you ready for the secret? Well, here goes. All I do is imagine that I have a friend who is asking me to invest $10,000 for me. Then I jot down all the questions that I would like to ask my friend to find out if what he is about to do with my $10,000 makes sense. Then I ask myself those very same questions and then write down my own personal answers to those questions. For example, the first question can be as simple as, “how will you make my $10,000 grow?” Some of the other ones I may ask might be, “what will you invest in and what is the yearly return on investment estimated to be?” You get the picture. Just ask more questions to get more answers. The more answers you have, the more detailed your trading plan will be. There you have it, a quick and easy start to your trading plan. I told you it would be easy to get the ball rolling.

This simple plan is by no means meant to be comprehensive, but is a start to point you in the right direction. I would venture to say that over 90-95% of would be traders never ever get this far. This could very well be a contributing factor to why a large percentage never do very well in the markets.

I would suggest that if you can’t write a single sentence or single paragraph describing how you hope to achieve your goal then you won’t achieve your goal. If you can’t write a single sentence or paragraph then it apparently is not important enough for you to put that type of effort into…even though that is very little effort. So go ahead, ask yourself and answer a few questions to create a simple trading plan. This is your first exercise. This is the creation of your roadmap before your successful journey for the long term to profits in trading.

Now one thing I don’t want you to do is to initially make this too laborious and tedious a task. In fact, I’m only going to require that you take 15 min. For that 15 min. write out the questions and answers for your basic trading plan. Remember 15 min. is your time limit you can set an alarm to go off in 15 min. use a stopwatch or something like that but don’t write any longer than 15 min. At the end of 15 min. stop even if you have more ideas. If you feel up bit more ambitious you can spend 15 min. writing down your questions only and then spend the next 15 min. answering those questions. You should now have the basic idea of the who, what, when, where, why, and how of your trading. You can refer to what you have written from time to time again using the information as a reference. As you progress I would suggest that you keep this in a spiral bound notebook for future reference. Now, of course, you may want put it in a software program such as a word processor or note-taking program. Place it somewhere where you can add to it and reference it from time to time.