Routine and Habits II: The Business Plan

My starting point each September 1 (my year runs Sept 1 to Aug 31) is my business plan.  Since I treat trading as a business and we all know most, if not all successful businesses, have a business plan, I thought this the appropriate place to begin Success Routines and Habits.

I prepare my Business Plan in the first two weeks of September and I give priority to the task.  Below are my headings; they are far from being cast in stone and the same can be said for the plan. It’s reviewed and revised quarterly. The plan serves as a guide only. In the recent past, I can’t remember when I did not make some mid-stream correction.


  • Vision & Mission Statement. To me this is the crux of the document. What we want to become and why must align with our values otherwise all the plan will be is wallpaper and will be as much use.
  • Goals
  • Expenses
  • Projected Income
  • Trading Plan
  •    Rules
  •    Trading Timeframe
  •    Markets
  •    How do I know when plan is not working?
  •   When will I take an enforced break?
  • Risk Management Plan
  •    Position Sizing per trade
  •   Position Sizing Portfolio
  •   Initial Risk Exposure per trade
  •   Initial Risk Exposure Portfolio
  •   When and how to Pyramid.
  •   When and How to make Profits available to trading capital.
  •    Maximum Loss per trade
  • Ongoing education in Plan, Risk Management and Psychology
  •    Time Allocation
  •    Dollar Budget
  •    Areas to Focus on within each area (Plan, RM and Psy)
  • Focus and Review Plans
  •    Especially if there are important life-style changes e.g. changing jobs, having a child etc
  • Disaster and Contingency Plans

A few years ago I attended a seminar by Van Tharp (; also his blog at: on Business Plans. At the end of the seminar, we all had to do a business plan. I have attached this as one of the better ones submitted to give you an idea of the form the plan can take.


5 thoughts on “Routine and Habits II: The Business Plan”

  1. Thank you for your posts on how to succeed as a trader and your very detailed vision and goals when you first started to learn and trade.

    I wish to add some observations arising from your document:

    1. I have done such document once a year, the second being a review and hence, a revision based on progress or lack of progress from the first document.

    2. My bias is different from yours, ie, I tended to exit early , ie taking profits early for fear of losing out! Have improved now and more patient to ride profits with the trend.

    3.Whenever I enter a trade, I have always kept an Equity Journal and a Psychological Journal. In addition, I read and write/comment almost daily on blogs to internalize new pointers gained, my Daily Journal, so to speak.

    4.In addition to learning and trading as a novice in my second year now, I have been quite lucrative in most of my past investments in Real Estate for more than three decades, which gives me the ‘Nest Egg’ to use part as Capital to turn to online trading now. However, I am starting small and will increase capital gradually each year with experience in order to start position sizing.

    5. At this day and age, we start with instant charting data, unlike when you first started ie you had to manually collect data and then format your charts. Now we can just subscribe to charting tools and have instant charts of different timeframes to start our day of trading.

    In many ways, you had to learn trading at a greater disadvantge to present students who have all the modern technology to make learning so much easier.

    Now it is up to us to be persistent and disciplined to succeed, as your series of posts show and more to come.

    To maintain my State of Mind for trading, I also find time to move away by doing something totally different, such as, working on a pet benefit project which I hope to carry through.

    Your uncanny abilities to impart knowledge to the willing mind sets you apart as a truly effective educator, for which we your STC students will bear witness to.

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