HOW TO DOCUMENT YOUR TRADING PLAN
I hope that by now I have convinced you that it is essential to keep a trading diary. Will you promise to keep one? If so, I’ll open my Outlook again and show you the exit diary. Take a look at Figures 3.6
I believe that the best format for a trading plan is similar to the diary we have just reviewed. When you scan stocks, you can keep brief notes on the potentially interesting ones in a spreadsheet or on a notepad with three columns: Date, Ticker, and Comment. The idea is to narrow down your search to a few actionable stocks. Once you have a handful of candidates, it is time to work them up and create an action plan for each promising one.
When you find a stock that you think you might want to trade in the days ahead, create a plan for it using the same format as the diary, shown above. Capture a weekly chart using SnagIt, mark its signals with arrows and lines and write on it. Paste the chart with all the markings into a newly created entry in your Outlook Calendar. Now capture a daily chart, mark it up, and paste it into the same Outlook entry, below the weekly chart. Name that Calendar entry after the stock and label it as a planned trade so that you can easily recognize it. Save your newly created entry.
The weekly DB chart shows that the price dropped below the value zone, underneath ...