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Investing With A Plan – Your Investing Playbook





The stock market is a football stadium. The investors and traders are the players. But there is not a single game that can ever be won if there isn’t a soundproof plan in place to score the winning touchdown. The best of the best, I am talking the creme de la creme, are ALWAYS prepared for any possible scenario – as they have plans A to Z lined up, waiting to be executed at the given call. In today’s lesson, we will be showing you how investing with a plan allows investors to not only be able to be better prepared, but to also make the best financial decision you could make. Only with time, will you be able to have better intuitive judgment when making investment decisions.


But before we begin, we would like you to read and agree to the Terms & Conditions of this post before you proceed any further.

Disclaimer: Invest In Wall Street is in no way financially or legally responsible for any investing decisions made by any of our readers and are, in turn, acting on their own free will. The information in this article is purely educational and should not be abused or misconstrued in any way, shape, or form.


Investing With A Plan



An investing plan is a set of rules and guidelines that defines how you invest. An investing plan helps you decide in advance what you’ll do, and how you’ll do it.

This creates a repeatable process that can take the guess work out of investing and make the investing process much easier.

Each plan includes six important components – the investments objective, watch list criteria, entry rules, money management rules, exit rules, and routine.

Let’s begin with objective, which represents the specific goal of your investing plan. Once you have this in place, you’ll set rules based on your desired outcome.





An objective can vary from the goal of an individual trade – to the goal of your entire portfolio. Because each objective has a different scope, investors may implement multiple objectives simultaneously.

For example, you may use one investing plan with an objective that concerns your overall portfolio, such as asset allocation among stocks, bonds, options, and cash.

And then, you could have another investing plan for a specific asset class, like stocks. This plan could help you decide which stocks to buy, when to buy them, how many shares to buy, and when to sell them.

Now on to the next component, the watch list criteria – this section details what specific qualities you’re looking for in an investment.




Any investment that meets these criteria will be added to your watchlist.

Watchlist criteria will differ for each investor. Some investors might create a watch list based on a company’s financial statement, which known as fundamental analysis.

Other investors might use price and volume movements to determine whether a stock fits their watchlist criteria – this is technical analysis.

Many investors combine elements of fundamental and technical analysis into their watchlist criteria because both could help determine which securities to watch.

Once you’ve created your watchlist, you need to determine when to buy. These are known as entry rules, guidelines that dictate when you’ll purchase a security on your watchlist.

Entry Rules



Determining your entry rules before you buy reduces the guess work when deciding when to enter a trade. Entry rules may be different depending on the investor – but here is one simplified example.

Let’s say you have company stock XYZ on your watch list and are waiting for the correct time to buy.

Your rules dictate that you’ll invest in a stock – you might choose to invest when the stock’s price breaks resistance with high volume, say 150% of the daily average.

With this rule in place, you keep an eye on the chart – but when this happens, this begs the question : How much should I buy?

This is when you consult the money management rules component of your investing plan.

Money Management

Your money management rules define your position sizing guidelines. To put it another way, this is where you weigh your portfolio size and your risk tolerance to figure out how many shares to buy.



When it’s time to buy, you should first look at your portfolio to determine how your transaction will fit in the big picture.

For example, you may have a rule that you won’t invest more than 10% or your portfolio in any one security. If you have a $100k portfolio, you wouldn’t invest more than $10k in a single security.

Now that you know what to invest in and when to buy, let’s move on to the next investing plan component, your exit rules.

Exit Rules

Exit rules are important because you’ve already determined the acceptable profit or loss before entering a trade.

For example, one investor might have an exit rule to place a stop order at 3% below recent support levels. If the price hits this level, it will trigger the order, and the security will automatically be sold.

Creating these rules in advance removes emotion and uncertainty from your trading exits You’ll know what to do, no
matter which direction the market goes. Now all you have left to do is create a routine and follow it – as this will help you make sure everything is in the right place.





Often, a routine consists of quarterly, weekly, and possibly, daily actions.

Your routine could involve everything we’ve mentioned so far, maintaining your objective, creating and updating a watch list, buying and selling assets in line with your entry and exit rules, and balancing your portfolio according to your money management rules.

With an investing plan by your side, you’ll soon feel confident every step of the way.


Quick Recap

In Review….

Investing Plan

  • An investing plan is a set of rules and guidelines that defines how you invest. An investing plan helps you decide in advance what you’ll do, and how you’ll do it
  • This creates a repeatable process that can take the guess work out of investing and make the investing process much easier
  • Your investing plan should consist of 6 components…..


  1. Objective – The goal of a single trade or your entire portfolio
  2. Watchlist – Specific qualities you’re looking for in an investment
  3. Entry Rules – Reduces the guess work when deciding when to enter a trade
  4. Money Management – Define your position sizing guidelines.
  5. Exit Rules – Removes emotion and uncertainty from your trading exits
  6. Routine – Consists of quarterly, weekly, and possibly, daily actions


And the rest is self-explanatory. Planning ahead of time before you commit to any investment determines the who, what, when, where, why, and how for you – all at once. You will be able to better organize your thoughts beforehand rather that become overwhelmed and stressed through a sudden case of analysis paralysis. Having an investing plan in place is something that you should keep in mind as you go on to make your very next purchase of stocks – or any other financial assets for that matter.

The key to any plan is TO STICK TO THE PLAN – and never manage to falter from it, whatever the case may be. It will in due time act like “clock work” as you use it time and time again – to the very edge of perfection.

I hope you have enjoyed this post and found the information to be quite useful. If you have any questions or concerns, please feel free to leave them down in the comment thread below and make sure to like and share this post.

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