Trading Lesson of the Week

• March 15, 2026
• ACXP | NUAI

In This Week’s Issue:

• Market Outlook – The Cloud of Uncertainty
• This Week’s Market Minutes video – When to Buy Stock Market Bargains
• Trader Training – Why Every Trader Needs a Written Trading Plan
• Strategy – Stocks in Play

 

Market Outlook – The Cloud of Uncertainty

Investors do not like uncertainty because it makes it difficult to manage risk. When a market can move sharply against you because of a headline, many investors choose to just sit on the sidelines.

Uncertainty over oil prices remains the focus this week. Oil remains at lofty prices because of concerns over supplies getting out of the Middle East. When that changes, expect Oil to drop and the uncertainty hanging over stocks to abate.

Until then, the best trades are short term so that risk can be tightly managed regardless of how a news headline surprises the market. The market is not bad, but it is hesitant and that has caused the indexes to drift lower with an absence of committed buyers.

 

This Week’s Market Minutes Video – When to Buy Stock Market Bargains

Stocks moving lower creates buying opportunities but buying too early can mean paying too much and then riding out a stock market crash. This week, I teach the simple pattern that works well to buy stock market bargains. Then, a look at the overall markets to determine the risk of a stock market crash. Finally, a look at the trade of the week on AGRZ.

Click here to watch on YouTube

https://youtu.be/_SG8dHVaOUo

 

Commentary – Why Every Trader Needs a Written Trading Plan

Would you build a house without a blueprint?
Would you start a business without putting a plan on paper?

Most people understand the importance of planning in these areas—yet very few traders have a written plan for how they approach the stock market. That alone explains why so few consistently outperform it. For many investors, trading ends up looking more like a trip to a casino than a disciplined business.

In today’s markets—faster, more volatile, and often seemingly irrational—a structured trading plan isn’t optional. It’s essential. The market hasn’t necessarily become harder, but it has evolved. Success now requires an approach that reflects how markets behave today, not how they behaved in the past.

The good news? A trading plan doesn’t need to be long or complicated. In fact, the best plans are concise, practical, and easy to follow. What matters is that it clearly defines how you trade.

Here are the key components every effective trading plan should include:

1. Rules for Entry

What exactly qualifies a stock as a buy?

Most investors never clearly define this. Instead, they rely on what “makes sense” in the moment—something they read, heard, or observed. The problem is that what feels logical is often influenced by recent experiences, not reliable patterns.

Our brains are wired to look for similarities. If you recently saw a stock double in three months, you may start searching for other stocks that “look the same.” But that kind of pattern recognition is often misleading. The original winner was likely an exception, not a repeatable setup.

Successful traders don’t rely on intuition—they rely on tested rules.

Your entry rules should:

• Be specific and objective
• Be tested over a large sample size
• Demonstrate a positive expected outcome

They don’t need to be complex. For example:

• Buying stocks with a P/E ratio below the industry average
• Entering on a 50-day moving average crossing above the 200-day

What matters is not the idea—it’s whether the idea works consistently over time.

Most effective strategies use a small set of criteria (typically 3–7 rules). And importantly, you should only apply a limited number of strategies at once—usually no more than two—depending on market conditions.

A simple checklist for entries is critical. It keeps emotion from overriding discipline when it matters most.

2. Risk Management

Every trader knows they won’t be right all the time. But very few define what to do when they’re wrong.

Risk management starts with one key question:
At what price is my trade proven wrong?

Before entering any trade, you should already know your exit point for a loss. This allows you to control risk and protect your capital—because running out of capital is the only way to guarantee failure.

Position sizing should always be based on risk—not on how much you can afford to buy.

For example:

• Buy at $10
• Stop loss at $9
• Risk per share = $1
• If your max risk per trade is $500 → buy 500 shares

This approach ensures consistency and longevity.

Equally important is how you evaluate performance. Don’t just measure dollars made or lost—measure returns relative to risk.

• Making $3,000 on $500 risk = excellent (6R)
• Making $500 on $1,000 risk = poor

Your trading plan should clearly define:

• Your maximum risk per trade
• Your stop-loss rules
• Your daily/weekly loss limits (when to step away)

3. Rules for Exit

Just as entries must be defined, so must exits.

Most traders focus on being “right” more often. But profitability doesn’t come from a high win rate—it comes from maximizing expected returns.

Consider this:

A strategy wins 70% of the time:

• 3 losses of $500
• 6 gains of $1,000
• 1 gain of $10,000

Now compare two exit strategies:

Strategy A: Take profit at $1,000
→ Profit over 10 trades = $5,500

Strategy B:

• Hold for $10,000 winner
• Exit at breakeven if gains fade from $1,000
  → Profit over 10 trades = $8,500

Even though Strategy B wins less often, it makes significantly more money.

The lesson:
Don’t optimize for being right—optimize for making money.

Your exit rules should be tested and designed to maximize returns across many trades, not just individual outcomes.

4. Process

A trading plan isn’t just what you do—it’s how you do it.

Discipline is easier when you follow a defined process. Your plan should outline:

• When you scan for opportunities
• How you identify setups
• What tools you use
• How you manage open trades

Keep it detailed enough to guide you—but simple enough to follow consistently.

Consistency in process leads to consistency in results.

5. Emotional Control

This is where most traders fail.

Humans are naturally emotional about money. That emotional attachment leads to breaking rules—even when those rules have been proven to work.

The biggest challenge? Fear of loss.

To manage this, your plan should include:

• Strategies to stay disciplined
• Accountability (e.g., reviewing trades with a partner or mentor)
• Risk levels that you are truly comfortable with

If the amount you risk causes stress, you will override your system.
If you’re comfortable with the risk, you’re far more likely to follow your rules.

Identify your emotional triggers—and build safeguards against them.

Final Thoughts

Trading success doesn’t come from intelligence, tips, or luck. It comes from consistency—and consistency comes from having a plan.

A simple, well-tested trading plan that you actually follow will outperform a complex strategy driven by emotion every time.

If you want to trade like a professional, start by writing your plan.