The Game Plan

Harry and John are talking. John says to Harry he recently lost big
in the market. Harry asks, “Were you a bull or a bear?” “Neither,”
says John, “just a plain simple ass.”

After developing a trading plan, a trader should then come up with
a game plan that will help him to implement that trading plan. The
game plan regulates the day to day decisions one makes when trading
and is what is used to execute the trading plan. The difference between
a game plan and a trading plan is that a trading plan may specify buying X
number of contracts when the market is within half a point from a trend
line and risk two points on the other side of it should it break through. The
X is determined by a formula in the money management plan part of the
trading plan. The game plan will then be used to identify when the criteria
is met, to time entry into the trade, to determine how many contracts to
actually trade, to prepare the exit strategies, to monitor the risk, and do
anything else vital to the success of that trade. The importance of the game
plan is that it prepares you for the trade while making trading a little bit
easier.