How exactly do you create and follow a trading plan when and how to pay yourself salary from Trading profits. How do you track your profits and loss and analyze your own trading performance? These are all important matters you must learn in order to truly operate your trading as a business. Have you ever wondered what it takes to succeed as a Trader Well, I'm here to Spill The Beans today I was consistently losing money from trading for over 2 years when I first started. The moment that changed everything for me was when I realized I need to take my trading seriously as a business rather than a casual Hobby In this video, I'll be revealing the exact four steps I've taken to operate my trading business.

Remember guys, 90% of old Traders fail and at the same time 90 % or more Traders Treat this thing as a casual sight, hustle, or get-rich quick scheme. So if you simply follow the four steps I'm about to share with you, you will already be ahead of 90% of other Traders out there in this video. You're going to learn how to create trading plans or business plans for your trading, how to journal effectively for you to maximize your profits and minimize losses, how and what to account for your trading expenses so you can save money on paying taxes, How to withdraw profits from your trading and pay yourself salary effectively. All of these crucial steps are lessons I've learned from over eight years of trading.

There's no cookie cutter tips like oh, use a 10 EMA indicator or 13 EMA or memorize these chart patterns and you'll make money like, come on. So if you're ready for some no BS Pro tips on Trading and most importantly, operating your own successful trading business, then make sure to hit the like button and subscribe if you haven't done so already. Step number one: Creating comprehensive trading plans. Now the first important step to start treating trading as a business is to carefully craft a trading plan and meticulously follow it for each and every single trade that you're taking.

Just like any business plan, a trading plan is your road map to success. It outlines your A+ and B+ strategies, detailed plans of how to execute them, your rules, and your risk management protocols. When I first started out trading over eight years ago, I used to just press the buy button and getting into trades without really considering what the potential outcomes or risks were. In other words, I used to just make plans on the go I would just jump into trades and sometimes following signals or alert and then only after that I started trying to PL out my profit.

Target risk and stop out area and worry about oh my God What do I do Now for some of you watching this right now, you might be doing the same thing as well. Okay, I get it nowadays. people love to be spontaneous and go with the flow. but remember that's the stuff you can do when you go on your backpacking trip in.

Eastern Europe Now when thousands of dollars in your trading account is on the line in the stock market just like the younger Shay and most beginner Traders out there, we tend to focus on trading to make a quick profit rather than trading the chart and making proper plans to follow. Remember: Traders A solid trading plan should include at the minimum a thesis or strategy, potential entry, profit Target and risk area. Let me show you how to do that right now. Okay, so you're now looking at my trading view chart over here on the stock: Airbnb This is a stock I Actually traded today myself.

Uh, I'm just going to show you how I create a very simple trading plan. So when this stock showed up on my scanner this morning, it's a huge gap up, right? We're talking about Pri's close 132s gapping up to around 1480s pre-market and it does have a very positive news that the stock is to be included in the S&P 500. That's a big deal for the stock Airbnb The last time um, I think it was Tesla Tesla also got included in S&P 500 and if you look at the charts for Tesla, it ran for multiple days into new alltime highs after that. Obviously I'm not saying Airbnb is Tesla, but I'm just talking about how big of a deal that catalyst is.

Okay, so that establishes my bullish bias on Airbnb Now let talk about about how to create a trading plan on the around the executions. So whenever you have these kind of huge gap up right, you can see pre-market highs is around this 140 141s area. we just call it round it up to 141s. Pre-market Lows is around this area 139 60s and you can see visually that lines up on the daily chart that daily resistance level over here at 141s right? so you can see premarket were trading in this range on the daily chart.

so essentially for me to be long biased I would preferably see the stock break out of that range on on the daily chart essentially a pre-market range and to continue to the upside. why do I want to see that? Because you can see over that resistance here. you have a lot of room for the stock to run around 144s here and 145s. So if we Mark that here 145s, 144s and then if it keeps going which it could right, you know.

potentially. Um, this say upside to 146 80s. So that's how you know the potential upside for the stock. You are using the different support and resistance levels from the daily charts and the key level will be the daily levels that lines up with a pre-market range.

This is a strategy I've taught in one of my previous strategy videos um I call this the trend joint long setup um also the gapa reversal setup. as well. So now that I'm looking at this, you know the best way to execute is if the stock is able to break above that premarket highs because you know couple minutes leading into the market open, you're already trading at 141s, right? So I wanted to break out of this range and to join the trend to the upside to 144s. So we're talking about a two, a two three, Upside 144 145s.

If I'm risking that 141s or if you prefer to set your risk wider, then you be risking at one N 13960 that. but that's a pretty much about a dollar or more of risk depending on your risk tolerance. But for me I prefer to risk off the 141s and then join the trend on dips through the Longs side. um, to 144 145s or potentially higher.

So that's how you form the most basic trading plan. You need a buyers that can be technically based or fundamentally based. In this case, In this strategy that we're talking about right now, it's based on both you need an entry area. For me, it'll be 141s or around this range and risk area.

For me, that'll be right below 141s. I'll probably give a 40 50 cents risk and last but not least, profit targets that'll be 144 145 potentially. So in this case, I'm risking around 50 60 cents to potentially make $3 per share. And this is the chart of the executions of my actual trade according to all the levels we just talked about.

Remember: Traders This is the kind of planning you need to do before you enter the trade, not after you've already jumped in. Taking trades without a plan is like going into war without a weapon or getting married without a Prup. While I cannot make all of your trading plans for you every single day, you can receive my weekend watch list with some potential trades for the next week. If you want to receive this free watch list, I send out every single Sunday You can now sign up in the link down below and don't forget to drop a like on the video if you haven't done so already.

Okay, we just talked about creating trading plans or business plans essentially for your trading. Now moving on to the second step and how to properly treat your trading as a business. And that is to track your trades in a trading journal and to car carefully review your wins and losses in detail. Think about this businesses, whether big or small.

There's always an accountant or bookkeeper to carefully track the daily expenses and revenue from operations. This way, the owner of the business can perform detailed cost analysis and decide whether to deploy more capital and which areas to stop spending so much money on. The same can be said for trading. Remember, you are the owner of your trading business.

Let's call it. Mike Trading LLC Unless you're managing tens or hundreds of millions of dollars, you are most likely running the business as a solo business owner. Nowadays, there's plenty of trading journaling services available out there for10 to $20 a month such as Trader View or Trader sync. These Services allow you to import trades directly from your broker platforms and track your daily.

PN Now, however, I do think there is an issue with too much Automation and convenience these days. If all you need to do to track your trading performance is a simple click on the button I Think that removes the trader the owner of the business from a lot of self-reflection and deep thinking on the actual trading. It's up to you, not just to track your daily P&l but also the detailed factors of each trade. I Think think most Traders Usually just look at the win rate and the risk orward ratio and use that to determine how well they're doing.

And don't get me wrong, those are definitely very important factors to reveal, but what they don't reveal is the average holding time and winning trades versus losing trades and how well those individual strategies are performing according to the market cycles and sentiment. If you really want to take your trading business to the next level, I Think these are the true int acies of your trading that you should manually examine and work on because anybody can pay a $20 a month. Journal Service to track their daily Pnl and Average Risk award. but not a lot of people will review whether they are maximizing the wins versus the losers.

A few years ago I took a deep dive into my trading journal and all of my execution charts. I Saved. That's when I realized a lot of my winners are held for only about 30 minutes max. while I see that I hold on to my losers for quite a while longer, almost all the way till midday or in afternoon.

This finding was extremely interesting to me, so I kept on digging. That's why I realized the top five longest held losers wiped out 43% of my wins on the year. That's a staggering amount of profits, and ever since the discovery more than 5 years ago, I've been actively trying to maximize my holding time for the winners. sometimes.

I Hold on to winners for hours for the entire day or even next day. Remember, you are the sole owner of your trading business. No one else can look into your books and do a detailed analysis for you. As you probably know from my videos, my trading strategies that involve scalping, momentum, and shorting they require a very fast broker platform.

I Have some exciting news from the broker I personally use Center Point Security is now finally open in Canada Once again, you can now open an account with a lowered minimum of $20,000 and get one month free of Dash To the pro: that's the broker platform you see in all my YouTube videos. This promotions is available until the end of this month. If you want extremely fast order executions, extensive short location and routing options, then should definitely check out Center Point with a link down below. Step number three: accounting for trading expenses: I'm sure by now you're sick of me nagging at you about trading is a business.

It's not a hobby. sorry guys, sometimes I Just felt the need to emphasize this very important factor and part of treating trading as a serious business is keeping track of your operating expenses for tax purposes. This will help with managing a bank roll and paying yourself. And don't worry, we're going to be talking about how to pay yourself later on in the video.

so hold on tight. And if you're learning a lot from this video so far, please do me a huge favor and gently tap the like button down below. Okay, whether you're trading in the United States Canada or other parts of the world, trading will most likely be taxed as a business. And unfortunately, there's only a few things certain in life: death and paying for taxes.

And yes, while everyone dreads paying for taxes, there's still many ways to save and pay less money to the taxmen. One of these ways is writing off expenses associated with your trading business. In general, these expense categories are eligible as writeoffs, trading platforms, research tools, trading commissions, locate fees, office space, and even Education and Training. In order to be able to write off these expenses against your trading income, you as the business owner, need to be on top of your bookkeeping for the business.

And just like the Trading Journal we mentioned earlier, you should be keeping an accounting journal for your trading expenses, ideally on a monthly or even weekly basis. I Know for myself, these are my general monthly expenses for my trading business: $365 on trading PL platforms and data fees such as Dash Trader Pro and back testing platforms, and more $384 on trading softwares each month on stock scanners such as trade ideas, fundamental analysis tools such as briefing and Flash Secc, and last but not least, perhaps the most exciting day trading expense category ever: Broker fees such as trading commissions, margin fees, interest fees, and short location fees. This year, I'm spending on average $1900 on commissions and 1,400 on short loc fees per month and that is by far my biggest expense for my trading business. And I'm sure many of you are thinking right now oh my.

God Humble Trader Why are you paying so much for broker commissions? You can now trade for free at so many Z commission apps out there I Think for beginner Traders Starting out, it's totally fine to play around around trading on these free commission. Brokers Like such as Mumu Robin Hood Weebo, and many others, we all need to get started somewhere. But if you one day want to start taking trading seriously as a full-time business, using premium trading brokers on the desktop that require you to pay commissions will be 100% worth it. My stance: when I view my trading as a businesses: I Don't want to save Pennies on commissions and lose hundreds of dollars or thousands in profits.

Trading is a business after all and most times it takes money to make more money If paying for commissions means I get to execute my orders way faster than 90% of all Traders out there I Think it's really well worth it. Same thing for paying for premium subscriptions and tools like I mentioned earlier. Remember when all of these expenses fees are tracked and accounted for correctly? they can be tax writeoffs for your trading income Now of course, the specifics of these tips will depend on your tax, country, and location, so make sure you check with your local. CPA I'm located in BC Canada so I can only speak for my own personal situation here.

I've done videos for the US Trader tax status as well. Step number four: Strategically pay yourself with trading profits. Okay, so now that we've covered keeping books for your trading business, the next step is just as equally important if not more. and that is to pay yourself regularly as a Trader look if you've been following along, you've done well so far through all the steps one two three, you created and followed your own trading plans.

You've kept a detailed trading journal tracking your wins and losses and you've accounted for all your trading expenses. For your business, you've been very disciplined and treated your trading serious y as a business. I'm very proud of you now. None of that matters if you do not pay yourself at the end of the day.

Remember Traders We started this trading business in order to gain Financial Freedom and time, freedom for ourselves and to not have a boss telling us what to do and when to do it anymore. So the best reward you can give for yourself now is to take that money out regularly so you can blow the money on Lamborghinis private jets and outrageous parties? No, no, no, that's not exactly what I meant I mean to take money out and pay yourself as a Trader responsibly. But if you are throwing outrageous parties though, make sure to invite me. I Get this question a lot from traders in my community.

Hey, Shay I was so used to a regular and fixed paycheck for my boss twice a month. Now that I'm trading full-time and making good money, what is the best system to pay myself whenever I get asked that question I Always feel extremely proud I Mean it's not a small feat to get to this point while I do not have one definitive answer on this is the exact way to pay yourself as a trading business. I do have three recommended options for Traders to consider all of these methods. I've personally experimented with my own trading and now I'm sharing this with you.

So if you appreciate this, make sure to drop drop a like down below if you haven't done so already. The first way to pay yourself is also the simplest and that is to take out exactly what you need to live on each month. For example, hypothetically speaking, you need $100,000 in cash to pay your living expenses in a year. That number sounds a little bit High I know, but trust me, if you're in expensive cities like Vancouver San Francisco LA or New York you need it.

$1,000 divid by 12 is around 8,300 per month. That would be the minimum amount of cash you take out each and every single month and this is the first method. However, this option of paying yourself does not take account the taxes that you'll need to pay on your trading income and that's the reason. I Also recommend the second approach to paying yourself, which is prioritizing saving for taxes.

Let's say you can confidently make at least $10,000 a month on trading and look at your past 12 months history. you've been consistently making that amount. That means you will make around $120,000 per year with that number in mind. Then take a look at your tax bracket for your country states or the province that you're in and take out what you need to meet your tax bracket.

In my case, in this example, since I live in BC Canada my marginal tax rate are $120,000 US income is pretty much 40.7% because that equates to around $160,000 Canadian per year. So that means each and every single month I will need to take out at least $4,000 in an arm in order to pay for taxes. And if you're in a 20% tax bracket, then take out $2,000 and vice versa. Hopefully you don't need to pay an additional arm or a leg for taxes.

Okay I hope you're following a along over here. I Do have one more method of paying yourself from your trading profit and this is actually my personal favorite and it's one I personally do for myself right now. It's the least black and white method, but it's also the most flexible way I now prefer to take money out of my trading account depending on Market opportunities and Market Cycles I Have personally tried the two previous profit withdrawing methods. However, ever I do find one big downside: sometimes when the market is really hot I don't have enough capital and when the market is extremely slow I'm playing around with too much money which is very dangerous and can lead to bigger than expected losses.

So that's why I've created this third method that I'm about to tell you. Generally speaking, I will keep as much cash as I could in my trading account when the market is extremely hot. basically want see every other day the premarket scans are lit with gapper after gapper in both a small caps and large caps during those months. Yes, I may still pay myself a little bit, but I refrain from taking too much money out of the trading account.

I will take out the bare minimum needed for me to live on. This way, I can capitalize on the market opportunities as much as possible. We all know that businesses will generally allocate from marketing budgets during the holiday season, especially in November and December. So the same applies for your trading business.

During the bullish Market periods, you can consider putting more money into your trading account. Generally speaking, the hotter months of the market are going to be the first quarter of the year and the third quarter. Winter and holiday seasons are kind of a hit or a Miss depending on the year, so I would just adjust where needed. As for the slowest months of the year, that's typically going to be from June to September, I will make sure I withdraw as much money out as I can basically withdraw Almost 100% of our profits or more if I know the Market's going to be very dry in the summer with not a lot of gappers I Don't want to keep that much money in my trading account or in the markets unless I see some crazy hype sector show up.

Once again, the rough timeline I just mentioned is for General references only. Obviously, every single year is going to be different. 2020 and 2021 were the two outlier years that we've seen most recently. Remember, guys and girls trading is a business.

It's not a hobby Once again, once I started treating my own trading business more seriously five years ago. That's why I truly see my P&l curve change drastically for the better. Another thing that also helped me become profitable is to follow a strict pre-market routine to ensure that I'm fully prepared for the day. If you're curious about my process as a Trader and how I get ready every single morning, then check out this video over here.