A Comprehensive Guide to Creating Your Own Trading Plan

Improve your trading today!

Get a copy of my Trading Plan Guide used at the Trader’s Expo, it’s free!

The free trading guide includes:
  • A framework for developing a successful trading plan
  • General trading rules
  • A list of my top tools for trading the markets
  • Ideas for developing trading strategies
  • Guidelines for setting daily loss limits
  • Example trading goals
  • Methods for calculating position size
  • Record keeping tips
  • and much more!
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Please don’t hesitate to ask questions below, I read and respond to all comments on the blog.

Trading Plan Outline

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  • and much more!

Thank you, and enjoy!

Tim

Next Market Wizard

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About Tim Racette

Tim is a full-time trader in the futures and stock markets and founder of EminiMind.com. He is also a Chicago-land native, competitive mountain biker, adventurer, and ASU Sun Devil.

23 Responses to “A Comprehensive Guide to Creating Your Own Trading Plan”

  1. Great stuff! Just felt like I sat through a seminar for beginners. Exactly what I needed.

    • Thanks Landon, I had a great response at the expo and am sharing it with anyone who expresses interest. I’m currently compiling my trading rules into an concise eBook so stay tuned!

  2. I like the fact its stating that 80 percent psychology, many people underestimate that in trading.

  3. I was wondering if u ever traded over night and whats your perspective on swing trading versus day trading? Don’t u think day trading COULD be more profitable and less risky yet much more work, do u ever switch or think its possible for someone to be both? I am a full swing trader but see potential in day trading as well but lack the experience of it

    • Only the Euro Open (that’s night time here in Chicago). I like to trade when the other big players are in the market for two reasons, it’s easier to get in and out of positions due to higher liquidity, and there is more participation from a technical standpoint (the setups just seem to work better during the peak time periods that being the Euro/NYSE crossover).

  4. Whats the reason u only trade two sessions versus all 5 if opportunity presents itself?

    • The 7AM to 10:30AM CST has the most players in the futures markets. This the my favorite time to trade. Yes there are setups on the other time frames but after looking at lots and lots of data I find it’s not worth my time to sit in front of the screen any longer than I have to. I’d rather participate for the repeated good times and sit out when it slows down (and go do something else I find enjoyable like riding my bike 🙂

  5. Mr. Tim you mention in one of your rules place more weight on longer time frame.. what does this rule suggest?

    • When identifying the trend, I like to use a top down approach starting from the monthly chart working my way down to the micro time frames like a 512 tick chart. When all time frames are pointing in the same direction there is a strong possibility that the move will be fierce. It is also possible to have the weekly chart in an up trend, while the daily trend is pulling back, but the 15-min is in a small rally. I place more weight on the larger time frame.

  6. One advice I would add for beginning traders or people wanting to live off trading is you never wanna stay in a trade to make a specific dollar amount cuz that will make u lose the focus. Tom Baldwin and Mark Weinstein in the first Market Wizards have very good insights on this.

    • I completely agree Rufus. While it is important to have targets on your trades you need to devise a system that allows you to stay in the trend until it fails. I never place a cap or daily $ target, instead I continue to trade on good days and cease trading on slow choppy days when my setups may not be working as well. Limiting yourself to 2 stop outs on the day is another way I manage my risk.

  7. Very informative comments Mr Tim Racette. I am studying your techniques and observing to see if there is any thing i don’t see and vice versa. Your work is truly appreciated and paid attention to.

  8. Erinson Villarroel Reply May 19, 2011 at 7:21 am

    Hi Tim a question because you use
    data
    10 year U.S. Treasury.
    BANK Index
    ETFs sector
    Core sector that you use this data…?
    And also you trade American session…?

    Thanks..

    • Yes Erinson I look mostly at BANK intraday, the NYSE Tick, and the ES & 6E charts. I trade the Euro open and the NYSE open. I’m usually done by noon CST.

  9. Subject: Trading Plan for Extremely Volatile Markets

    Hello Tim !
    🙂

    First I would like to thanks You for the help You provide me to build my Trading Plan.

    I wished to add something about the Trading Plan for people who are looking to build them own.

    Indeed, we are actually seeing some Extremely Volatile markets.
    It can be quiet hurtful to get in without any idea or experience.

    I suggest to each of Us trading intra-day or swing to consider a special “volatile situation” section in Our trading Plan.

    This should guide & supply Us to remain calm & trade wisely through times like We are seeing currently.

    I can give as subsection these few points:
    – Do I stay aside or get in ?
    – Maximum # of positions I will engage (fewer, safer it is)
    – How much I wide my stops

    I hope that all can help and feel free to add Your tips and share with Us.

    Khaled.
    Paris.

    • Great points Khaled. When the market volatility increases it can shake us out of our positions before they have a chance to work. This whipsaw action can become very frustrating. One technique I use when volatility becomes extreme is to cut my position size in half and double my stop. This results in the same risk/reward, and often a larger profit return.

      Also know that it is OKAY to sit in cash. If you’re ever unsure about a position, hesitating to pull the trigger, it’s best to sit tight and do nothing.

  10. Tim – Thanks for such great information and for keeping all things well organized. You have a great blog.

    Got to ask you a question:

    Is 7AM CST a good start time for trading both the ES and the 6E?

    You mentioned above: 7AM to 10:30AM CST has the most players in the futures markets.

    I just wanted to hear you confirm to make sure I understand your statement.

    Thanks
    T Allen

    • Yep, The Euro open can be a good time to trade, but I typically consider the start to the day at 7AM CST. From 7:00 – 7:30 AM I typically being to familiarize myself with what overnight action took place and prepare to trade. Usually there is some sort of larger news announcement an hour before the bell and after this is released is when I look for my first trade of the day in the ES or 6E. That is typically a Gap Fill setup in the ES and a move off a 15-min level in the Euro. Then I go from there.

  11. Hello Tim,

    I enjoy the blog. I work full-time, 40 hours a week, and interesting in the trading the ES mini for part-time income. Goal is 3-4 points a week after identifying the sweet spots.

    Would you recommend trading the ES part-time, maybe reviewing and setup at night and the placing limit buy/sell order during the day with stop orders preset.

    Thank you

    • If you stick to the 15-min chart and trade the 7AM to say 10AM CST then yes, it would be a viable option.Just get comfortable with the idea of not having to take a trade on some days because you don’t want to end up forcing trades if they’re not there. If you stick to the setups only during those times it could be a nice way to trade.

  12. Thanks Tim,

    Thank you kindly for responding. I think what I am missing is a strategy or setup approach. Right now, I just studying the SPX and ES on the 15min, 60min, 1 hour, and daily chart identifying trends, chart patterns, pivots, support, and resistance and look for sweet spots to enter on the paper trading. Also, confirm with lower indicators.

    Does your book offer your strategy to trading the ES or just a general approach?

    Thanks for replying.

  13. I’ve been reading on investopedia.com how it’s imperative you have a trading plan before you begin trading. And understand the main elements that go into one from swingtradesystems.com. Both sites don’t go into too much detail, just give an overview. But I need the detail!

    It looks like your Trading Plan Guide will give that detail. I’m especially interest in how to set daily loss limits and how to calculate position sizes.

    Please go ahead send me a copy to the email address I submitted. Just please go easy on giving out my address to others. I get too much mail as it is.

    Steve O.

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