Building a Business Plan for Trading

Sean McLaughlin
April 20, 2023

I’m in the process of creating a formal “business plan” for one of my trading strategies.

In 2002, I went through an arduous experience of creating an operating agreement, disclosure documents, and strategy explainers to attract investors as I built a small commodities hedge fund from scratch. Ignorance was bliss.

It was a chore, but a worthwhile investment in my time and energy because I ultimately won the business and started the fund. Success!

Now I’m entertaining the idea of managing OPM (other people’s money) again, and I’m reminded of the rewards of this process.

I’ve always schemed out trading plans in the past, saving them in various forms in either Google docs, Google sheets, or notes in the Evernote app. But they were always for my eyes only. Probably undecipherable to even the most skilled archaeologist.

It’s been a long time since I’ve attempted to parse out every nut and bolt of any of my strategies so that someone else can read it, understand it, and most importantly, decide whether or not to invest in me managing their money.

I shouldn’t be surprised, but I’m finding this process to be very rewarding. I’m getting intense clarity on why I do certain things, where I make money, where I lose money, how my trading scales, and my limits as a human (non-robotic) trader.

In preparation for a meeting with a prop trading firm, I was asked to prepare all this info. And the wonderful outcome for me here is that no matter the result of the meeting (we either decide to work together or we don’t), I come out as a winner. Because now I’m more focused than I’ve ever been on what I’m doing and why it works, and how to do more of it. And the worst case scenario is I simply continue trading my own capital, only better.

The only thing left to do is win.

Trade 'em Well,

Sean McLaughlin
Chief Options Strategist
All Star Charts, Technical Analysis Research

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