Hey trader,
I spent Tuesday morning at the doctor’s office for my annual physical. Oddly enough, it took me back to the written trading plan that saved my trading career.
I barely went to the doctor in my 20s. I was riding on the coattails of youth like a lot of guys that age.
Kids changed that for me. My health is about being present for my family now.
I take care of myself differently because I know my why. Every trader needs that same clarity about why they’re in the markets.
Money is the obvious answer. Markets exist to make a profit.
Still, money means something different to each of us. Your reason shapes how you trade.
Mine goes back to Michigan, where I grew up with no finance culture whatsoever. I made money on my very first trades.
After that, I spent about five years struggling to find any rhythm. I nearly gave up.
A written trading plan pulled me out of it. I still lean on mine today, especially in a choppy market like the one we’ve had this fall.
If you’re stuck in a rough stretch right now, my story might save you a few years. It’ll also show you how a written trading plan builds the kind of confidence that keeps you from hesitating when it counts.
It starts with two jobs my parents told me never to take.
Two Jobs I Was Told Never to Take
I came of age in Michigan during the global financial crisis. My dad worked in the cement business.
My mom worked in the auto industry. Both of them told me not to go into either field.
That left me looking for another path where I could make money. America’s business is business, after all.
I bought my first stocks at 18. One was Sony out of Japan.
The other was MetroPCS, a cell phone company with a big footprint around Detroit. I made money on both.
I figured this trading thing was easy. The market corrected me quickly.
What followed was a few years of losing one trade after another. I wasn’t trend trading back then.
Instead, I jumped from one approach to the next without sticking with any of them:
- I tried penny stocks.
- I tried trading forex.
- I tried trading regular options.
None of it fit my personality. Around the five-year mark, I was feeling pretty hopeless.
How a Written Trading Plan Turned It Around
I made one decision that changed everything. I started writing everything down.
That became my first written trading plan. From then on, I only followed what was on the page.
I tuned out the news and what other people were saying.
Then something shifted. I’d watch the scenarios I wrote down play out within a margin of error.
Every time that happened, I trusted my own judgment a little more. That confidence matters because hesitation is death in this business.
Over time, I found the timeframe that fit my personality.
Not everyone is built to day trade. That’s okay.
If you’re struggling on the shorter timeframes, slow down. Trade the longer timeframes and spend more time watching the market.
I also noticed that I trade better when I’m trading less. Pressing fewer buttons usually means I’m positioned properly.
Need is dangerous in this business. When you need the money, the market won’t give it to you.
When you’re outcome agnostic, the market has a weird way of rewarding you.
Your written trading plan also has to start with realistic numbers. Over the years, traders have come to me saying they just want to make $500 a day.
That sounds reasonable until you run the numbers.
At roughly 252 trading days a year, $500 a day comes to $126,000. On a $5,000 account, that’s a return of more than 2,500% a year.
My best year was around 300%, during the COVID market. Results like that aren’t typical.
Nobody should build a written trading plan around them.
I’d rather risk $1 to make at least $3. That way, I can be wrong a lot and still make money over time.
That rule belongs in any written trading plan.
Sticking to My Written Trading Plan This Fall
My written trading plan is getting a real workout right now.
The NASDAQ is back where it was at the beginning of May. QQQ has had three sharp pullbacks in the last 12 months, including an 8% drop from October 6 into last week.
Pullbacks like these are normal in a bull market. Chop near the highs like this typically comes before big moves to the upside.
Momentum stocks have taken the worst of it. Some momentum baskets are down more than 40% since June.
Trinity Trade has held up far better than those baskets. Past performance doesn’t guarantee future results.
I’m still long. I’m also not chasing.
As of Thursday, we were holding around 16.5% cash in Trinity Trade. A break above last week’s high is a buy for me.
A break below last week’s low is a buy too.
Think of it like boxing. You have to take the hits without dropping your guard until your opponent wears itself out.
The market doesn’t run on your schedule or mine. A written trading plan lets me wait on it without flinching.
Money got me into the markets at 18. Today, staying healthy and present for my kids is part of my why too.
Figure out your why. Then build a written trading plan and trade only what’s on the page.
If you want to watch me apply this in real time, join me inside Trinity Trade. I’m live with the crew starting at 3:30 p.m. Eastern and running into the closing bell.
Talk soon,
Gianni Di Poce
