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Hey, this is Sasha Evdakov and welcome to another episode of Let's Talk Stocks. So number 103, your trading plan as you're getting started.
Today, we're focusing on your trading plan. It's just going to be a basic overview for those of you that are getting started but if you still struggling to move forward in the stock market then potentially you have the wrong plan, and you're focusing on the wrong thing.
If you're still trying to get to profitability, I know that's usually the hardest part. Then you're probably planning those incorrect things within your trading.
Now, when I look at a trading plan, I'm looking at one key thing for those of you that are just getting started. If I was to restart again and look at myself and guide myself in a plan, this is how I would do it. So that's what this video is going to cover.
We look at things, and we're looking at a trading plan. The first name type of plan that people look at is they look at money or monetary growth. Now within this, they start looking at charts, they look at their profitability, they're trying to look at profits and then the potential of what that money can buy them in the future.
Then they're also starting to look at some basic tactics or techniques, but this is a base plan. For me, I look at this more regarding not a plan, but you're trying to aim for a system which would be a whole different kind of a video lesson or session that we'd go into discussing. That's not necessarily a plan, and it's more of you're trying to get to a system. But a lot of people this is what their core is when they first initially get into the stock market. Because you're trying to get to profitability.
The main plan when you're just getting started
But that is not the true plan that you need when you're just getting started. The main plan when you're just getting started what you need to start thinking about should be completely different. It should be a plan that focuses on you. Your plan needs to focus on you and how is this different from a systematic plan?
Well, a systematic plan that we just mentioned it focuses more again on the system or the technicals. It's going to focus on how to make money, how to take profits into strength. Those are the things that it's going to cover and it's going to get in detail about. However, the trading plan that focuses on you, what this plan focuses on is really about making you better. If you're constantly struggling right here and you just slowly getting better this plan is getting to accelerate you to this next stage so that again you can go and continue moving forward. That's what the trading plan when you're first getting started should hone and focus on.
How is this going to be a lot different than what many people talked about?
Well, a lot of other people talked about the tactics, the techniques after all this are what we're attracted to. If you've run a business before in your life, or you're looking for profitability within a business, you'll often get attracted to techniques, how to bring more customers to your store? How to bring more Facebook likes? These are the things that people are attracted to, naturally. And this is what gets fed and advertise to. We're usually kind of opening our ears up for those kinds of messages. Those quick results, those get rich quick mentalities even if you're not a person who's into the get rich quick concepts your ears will perk up on how to make things easier, we humans want to make our lives easier.
When I hear something, how do I get to profitability? How do I take my trading, my thousand dollars, $50,000, $500,000 and how do I all of a sudden make it profitable instead of wasting five years, how do I do that in 5 months or 5 weeks?
If we hear something like that, we're attracted to it. Now, if it's 10 - 5 minutes, we become a little more skeptical but in general, this is how this process works. We get attracted to this concept.
We are always looking for already implementing things and getting the results, that's what we want. Our plans usually consist of this kind of tactics, and they usually consist of how do I make money, how do I become profitable? How many percentages can I make? But that's not the right and appropriate plan especially if you're new to the stock market.
If you're just getting started one week, two weeks, five weeks, five months, three months, if you're not profitable yet, if you're struggling for profitability and you're still learning and you're still educating yourself, there's a better approach and there's a better way that you need to be planning your future. You need to be planning on yourself.
How would this look like as I'm planning out something for myself? If I was to go back and plan something for myself. Well, you have to look at yourself a little bit different because everybody is heading different points. We're all looking for different points that we're trying to get to. For example, you might be - your retirement stage and you might just be looking for a thousand dollars a month to compensate yourself so that way you have some extra income because you already have a cushion and a nesting. For others of you, you might be parents, and you might be looking to make an extra just $500, $200 a month because your child is young and you're looking the safer college. So we're all at different stages.
Maybe you're a bachelor, perhaps you are single and you're looking to perhaps really accelerate your growth. Or potentially you want to be a full-time trader. Whatever your destination is that you're trying to get to, you can see that we're all at different points. But the plan is going to be somewhat similar and I'm going to show that to you in a second.
But first, let's take a look at things on a map and how you need to plan things out. Because I can give you a structure for a plan that you can start creating but I can't give you the exact details because your goals, your visions, your steps that you need to take are going to be different than someone else is.
Let's take a look at this map right here and what I want to do is share with you some concepts of getting to the final destination. And if we use California as just a based line for a goal or profitability, let's say that California is where we want to get to. Because we're all aiming for profitability but I'm going to say California is where I want to get to. And depending on where we want to get to in California is going to depend on the type of trader that you are. The goals that we've already discussed. Some of you guys are going to want to get to Sacramento because maybe you're retired. Others of you who are little younger you might want to go to San Francisco or maybe Los Angeles. Those of you that are potentially looking to make a few extra bucks or do it full time might be somewhere up here, up north.
We're all trying to hit these different points within California, that's our goal. And because of this, we're also starting at different points in our life. For example, some of you guys might be starting in Minneapolis, let's say this is the younger crowd. As you get into the mid-twenties or early thirties, you might be coming from Iowa. Then others of you who might be retired coming from Kansas City.
Depending on where you're starting from you might also be aiming for a different destination. You have a person - let's say from Kansas City who might take a road like this and get to Los Angeles because that's their goal. Their goal - let's say they are an older generation or they are a little bit in retirement, nothing against older folks, it's just there in that stage and they're trying to get to Los Angeles, let's say a lower risk turn to supplement their income. And you have other people, let's say are in their retirement and then they're looking to drive again and get to another destination in California.
But in this case, let's say we're going to Sacramento. But we might take this road. And we might go this path. And this is how we get to Sacramento. The destination is different, that's the initial first start. But then you also have other people coming in from different areas. If I'm coming in from Minneapolis, what could happen is [let's choose a different color], what could happen from Minneapolis is now I might want to go to Los Angeles and I could go somewhere like this. It could be somewhere entirely in a different way.
What the point here is that your all starting at different points. You're looking at various destinations within range. And what you need to do is come up with the plan and a path for you to drive and get to the next stage, and the next stage, and the next stage. Because that's ideally the goal. And if there are no gas stations in certain places, then you'll go to want to avoid let's say one of these areas. If there's no gas station on this road, you might want to choose a little bit of a different path. You might want to select a path may be something that goes along the lines of the Kansas, red path that we just did. So in either case, you're looking at how to create a plan for yourself. And only really you can do this for yourself because you know yourself the best.
Now one of the main problems that people have when creating these plans for themselves is they're not honest with themselves. Where they are realistic. Where their behavior is? How they're acting, behaving? How they're changing? How they're modifying things? This is what happens. Just like for example, we humans don't like to admit our faults, where we missed up, where we're doing things wrong, where we could improve. We don't want to recognize those things but with trading, you have to do it because otherwise, your profitability will suffer. If you don't admit to your friends "Oh, no. I'm not constantly late. I'm always on time." If you constantly say this, even though your area consistently late and your friends see that all that's going to happen is just in your mind, you're going to justify that everything is okay. And your friends may be "Okay, we'll just start showing up 15 - 25 minutes late." and then you guys are always meeting up on time.
People will make adjustments for you. But when you're talking about trading, it's a numbers game. You're looking for profitability. You're looking for every month or every year to consistently grow that account, whenever it is based on the final goal that you're trying to do and trying to achieve. You need to have a specific plan then and see yourself honestly. See yourself what is that you're doing? Where you need to get to and how to improve?
With that in mind, you're looking to create an appropriate plan for you to your destination. Now, unfortunately, there are roadways just like there are on the map when it comes to your destination to get to trading, to get to your success because everybody is starting at a different point. You could be starting in China. Everybody is starting on a different point and you're looking to get to a little bit of a different point because they have different risk tolerances.
As far as creating a basic general plan, how is it that you would do it? How would I go about doing it? So this is what I would do if I was in your shoes and I was just getting started this time frame, of course, could be a little bit differently. It depends on you, and it depends on your personality, how much time and effort that you're putting in but let's say month 1 to 3. If we break apart month 1 to 3, how is it that you would start structuring your plan to get you better? Because in the end, it comes down to you. Doesn't matter how much money I have in my bank account, how much profitability I'm making. It comes down to you, what your results are where you're going, and how you're getting there. What you need to do is the first plan, if you're getting started now you're creating a plan. And here's a basic concept. You might just down and say "I'm going to read and you're going to read these books." It could be a list of one book, and it could be a couple of books. You're going to read a couple of these books. That's going to be the first step.
Then, the next step is you're saying "Okay, I'm also going to watch these." and then again it could be certain videos, it could be video courses. That's going to be again the next part. As you continue moving forward, you might say "Okay, I'm also going to book a mentoring session or coaching session with Sasha." whatever it is, whoever it is, doesn't matter, whether it's with me or somebody else. That could be the next step.
Month 1 to 3, you have a few books to read, you have a few video courses you want to watch and you want to do one mentoring session or two or couple and talk to a few different traders or people that are investing. That could be your first stage within your plan. Again, month 1 to 3 this could be a month 1 to 12 for some of you, you could create a basic plan, month 1 to 12 if it's a slower journey, fine if you don't have a lot of time if you're working, fine. Then you've started in a different kind of phase. And that's perfectly okay. But in the next step, now you're getting into let's say month 4 to 6. Now again, what's the next step in your plan?
What is it that you're looking to do and accomplish. You could start it out with I'm going to read these next few books. And you would list these books. So these would be the books that you read. Then things could change a little bit because maybe up here you've watched videos and you've done let's say you've done a few courses up here from month 1 to 3.
But now in month 4 to 6, you could say "Now, I'm looking to set up a trading account or at least a paper trading account." so you're looking to set up a paper trading account. I'm looking to evaluate and get the hang of trading. Build up some habits, that's kind what you're looking to do — just kind of build up those systems in place for you to get the hang of trading. Just build up those habits to watch the markets a little bit more consistently. So it could be month 4 to 6. Now, you get into the next stage. Again, month let's say it could be 7 to 9, it could be 7 to 12, it could be just broken down in a month by month basis. Now you get to the next stage. Again, what is it that you're doing to do?
Okay, again you have maybe another video course that you need to watch, you could be lacking in a specific area because now you're evaluating your trading. So the key here could be an evaluation on what you are doing. Now you could also be ready to sign up to a paper trading account or a real account. But you're not prepared to execute real trade. If we sign up to a real account, the month 4 - 6 would be a paper trading account, but month 7 - 9 this would be a real account.
But you're not executing trades yet. You could at least open it up and have it going. Now, you're evaluating things, and again you might do another coaching or mentoring session because you're struggling with one or two things and putting one or two things together. Still, now you are creating a baseline plan. Your plan could be a little more detailed than this. I'm just giving you a basic overview.
Now you're getting into the next stage. So now, you might get into month let's say 10 - 12. As you get into month 10 - 12, now what you're going to do is start trading shares. And as you start trading real money, so now you're trading real money. But you're only trading let's say five shares. So your trade is five shares or less.
You might be thinking that why would I trade five shares and the reason for that when you're trading five shares, it allows you to get that energy from real money still but not a risk and lose a lot of money if you're still learning how things work and function in the markets. So with five shares you can still feel some off in the strength or average down or up, depending on your strategy, depending on your system.
So it gives you working with real money experience. It's all about building that experience. And if you can make that experience as cheap as possible, that's ideally what you want to. Of course, you could do paper trading and then move to real trading but the emotions and some of the other things that play a significant role with real money is difficult to learn until you put real money on the line. Because is everything merely is a theory until you put money on the line.
Trading five shares would get you started and get you building into using real money. Yes, of course, you're probably going to lose some money in the sense of commissions because commissions cost money and it's going to cost you by putting on those trades so you will be kind of costing yourself a little bit of money. But that's the cost of education. In fact think of it this way, if you actually put on a $5,000 trade and it went against you, and you took ahead of let's say $500 it's a lot more dangerous, it's a lot riskier, and it cost you a lot more on $500 than just $10 to $20 in commissions or $10 to $20 lost. That would be maybe a $50 loss versus a lot larger of an injury.
And then what your goal might be to put on let's say every month, you could do it every month, you could do it every week depending on where you're trying to get to. Every month, your goal would be to let's say do four trades. You have a minimum. Four trades minimum and why would you impose a minimum amount?
Well, by doing this it would allow you to ensure that you're practicing simply. Because some people are a little more nervous at putting on trade. If you're a bit nervous and you have four trade minimum that's once a week or you could do three in a week and one a little bit later. If you have a four trade minimum per month, then it gets you practicing. It's not too extreme but it's also not just pay well, the market is not right. Otherwise, you keep brushing it off and saying "I'm just waiting for the right opportunity." Because if you're looking to be a little more active, you're looking to get the practice, you need to put on trades in various market conditions. That's why you might want to play a little bit of a minimum for yourself, so that way you get things moving.
If you're a little bit uncomfortable that could say one trade a month, then that's what you're looking to do. But that way it gets you practicing and moving forward.
But in either case, if you look at this baseline plan, again this is just a basic plan we're looking at month 1 to 3. And then we're looking at month 4 to 6, and then 7 to 9, and later month 10 to 12. And of course, this could be a lot different, your timeline might be a lot shorter, could be a lot longer. It's going to be more detailed of a plan.
For me, my goal was to share with you a different variation in creating a plan. This is a basic plan if you're just getting started. This is a very, very basic plan if you're just getting started. You'd have to get more detail with which courses you want to get, which books you want to purchase, the people you want to mentor with. You might choose five different books from five different authors to get yourself a variety. You might select three different video courses from three different people and watch different people. In that way, you're starting to build a little bit of a dynamic of figuring out which road is better for you to travel on which directional path to get to that goal or destination you want to get to. And as you're trying to do this plan, if you're trying to map out your road so that way as your starting point, wherever your starting point is over here and your goal or destination is over here. You're going to have some web soft facts and some movements. Then eventually you'll get to that destination because that's what your goal if you're trying to get to that point in trying to get there.
But it's going to take a few different books, and it's going to take a few different systems, strategies to keep moving forward. And if you lack out one thing over here and you got a detour or flat tire, somewhere in this range, then you kind of need to go back and reevaluate things. Okay, what is it that I'm lacking. Would I need another video course? Do I need another coaching session? Am I doing the same thing over and over again?
Because I have some people that will tell me "yeah I've read a 100 books." Okay, that's fantastic! But if you read a hundred books and you've never seen things, then you might want to get a few video courses. Of if you read a hundred books, you've done a hundred video courses but you never put those into action, then you probably going to want to put yourself a limit into trading a few trades. That's kind of what it's all about. It's about creating a plan that gets you to move forward to your destination.
I hope this makes sense regarding trading a larger plan, I know it's not a plan about growing your account, that's a whole different kind of plan. That's a plan about a system. Building something that works consistently. When you have all these other things down, this personal things down for your regular plan then you build up the knowledge then you can create a system.
But until that point, you need to focus on a baseline plan like this especially if you're just getting started. You need to keep moving forward and how do you keep moving forward?
It takes me an hour or five hours, a couple of days to map and plan this thing up. Think about it, for me I used to think about these things for months and I used to re-plan my map. I used to re-plan the books that I would read and I'm still choosing different words and different books, some reading, studying, more so about now psychology, about behavior to control the emotions and those kinds of things. But I'm still remapping, resurfacing things on how do I become better. How do I make things a little more efficient?
That's the type of plan that we're looking is how to improve yourself and then strategically work on yourself. The trading environment is very tough to control. You can't manage that, all you can do is you control your environment in which you're doing, and then, in the end, the results will show in your trading.
Thanks for joining me in this video. Hope you find it helpful. If you want to see some of the other books or courses that I have available, click the button right over here or if you're going to watch another video that I have to take a look at this thumbnail right here.
Thanks again for joining me, in the end, remember do what you love, contribute to others, the most importantly live life abundantly. I'll see you next time.