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Swing Trading Plan Template

These 3 pages pose a series of 30 questions with model answers, organized into 7 categories.

It can serve as a template for your own swing trading plan.

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The Sonny Burnett Trading Company

Short-term: to develop and implement a swing trading system by month 20xx
Intermediate: to become profitable via swing trading by month 20xx
Long-term: to generate a consistent yearly income via swing trading

I. Self-assessment: Professional and Personal Goals

Why do I want to be a trader?

I want to be a trader because I cherish the independence of working on my own. While my current job provides some independence, I will never achieve the level of independence I desire at my company. I also question whether I truly want to surround myself with so many people. Trading would permit a solitude I have come to enjoy. Trading is also detailed-oriented without overlooking the need to attend to the big picture. It takes discipline and a well-planned and well-executed system to make it succeed. It thus suits my personality. If successful, I will be able to pursue my other life interests on my own terms. If successful, I will be able to meet the short-, intermediate-, and long-term goals listed above. There will also be the satisfaction that I have succeeded in an endeavor where so many others have not, and the satisfaction I will have from knowing others know I have done so.

I also want to be a trader in order to supplement the income from my current job.

What type of trader will I be?

I will be a technical trader. Moreover, I will be a discretionary trader. This is because I want to make the final decision of how and what I will trade. In other words, I will not turn things over completely to a fully automated, rule-based computer program. This will remind me how I am the one ultimately responsible for my trades. I will be a swing trader, holding trades over a period of days to weeks, with an average of 1–4 days. Day trading and scalping are not for me, as I am not aggressive but financially conservative and relatively risk-averse.

In general, I will always strive to be disciplined trader. I will adhere to and faithfully execute my trading system which I have planned in detail and thoroughly tested to be profitable.

What are my strengths and weaknesses, and how can they be leveraged?

One strength I have is that I am detailed and strive to be exact. But this can also be a weakness since it often leads to obsessive, repetitive behavior and prevents me from making a final move. This final move I even dangerously rush at times because I get frustrated with my inability to act. Another strength I have is that I am a logical planner and always do thorough research. But a weakness is that I cannot stand to lose my hard-earned money. This has its costs. While trading, I sometimes want to remain in a losing trade longer than I should, irrationally hoping against hope that the losses will magically turn into profits.

I can leverage my strengthens by recognizing how these attributes contribute to my confidence that I am on the right path of becoming consistently profitable. I can minimize the damage of my weaknesses by taking a final moment to calmly review my order one last time, ignoring which way the stock price is currently heading. Once assured that my order has been entered correctly, I will count to three and then confidently hit the buy/sell button. I will also always trade with a stop-loss order in place. Since this automates my exit, it relieves me from actually having to hit the sell button. But it still satisfies my desire to be a discretionary trader since I was the one who originally calculated where the stop-loss should go.

Am I emotionally stable enough to handle the stress of trading?

I will remain calm, cool, and collected at all times while trading. I will only trade when distractions are at a minimum, and when I am not overly tired or upset. I will either maintain a proper level of professionalism and rigorously adhere to my trading system, or I will forgo trading until I achieve a state of mind free from the danger of making reckless, emotionally-driven trades.

II. Trading Goals

What are my financial targets?

In the short-term, I am targeting a return of 20% in the first 6 months. Assuming an initial trading account of $10,000, this is a return of $2,000. Roughly, this equates to $333/mth, $77/wk and $16/day (assuming 21 trading days per month). During this same period, the drawdown on my account shall not exceed 10% or $1,000.

In the long-term, the targets are the same, but on a larger amount than the $10,000 initially used to confirm my trading system is truly profitable.

What are my yearly trading goals?

By this time next year, I will have become proficient in reading charts for trading opportunities and be able to easily apply my strategy to them. I will know my trading system inside and out. I will also develop at least two additional winning strategies.

What are my monthly trading goals?

To be consistently profitable. This will be possible because I will review my performance against my financial targets on a weekly and monthly basis. I will also study the trading strategies of successful traders in order to develop my own unique strategies. I will then thoroughly backtest and paper trade these strategies before committing real money. I will also study classic stock market theory for eight hours or more. I will also look for patterns in the daily entries of my trading journal.

What are my weekly trading goals?

To trade every day the markets are open. Because my trade exits will be automatic, most of my time will be spent seeking out new trading opportunities. I will only trade those stocks which best meet my selection criteria.

What are my daily trading goals?

To make sure I am up at least one hour before markets open. To monitor and reassess my open positions. To review and update my watch list with new potentials. To get a sense for the general direction of the stock market as a whole. To seek out new trading opportunities. To execute trades according to my trading strategy because I know it is detailed and tested to be profitable. By strictly adhering to it each and every day, I will ensure my weekly, monthly and annual goals are met. This can only be done if I dampen my emotions and trade objectively and with the utmost professionalism. To work no longer than three hours after markets close. To update my trading logs, to make a trading journal entry, and to generally prepare for the following trading day.

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