trading plan is a tool that you can use to clearly define your trading objectives and help you achieve them. Developing a Trading Plan and sticking to it are the two main ingredients of trading discipline.

A trading plan defines what is supposed to be done, why, when, and how. It covers your trader personality, personal expectations, risk management rules, and trading system(s).

If you fail to plan, then you’ve already planned to fail.

A lot of traders search for the holy grail of entry and exit strategies. What’s important about your trading plan is it gives you a road map to follow consistently in an uncertain environment.

This can help to create consistency in your trading.

Whether or not you have a plan now, here are some ideas to help with the process.

Simple Components To Your Trading Plan

Trade Identification

What are your major signals? What is the major triggers or anticipatory signals that you will be using to help you identify your best A+ trading plan setups?

Are you using moving averages or some other indicator, price levels, breakouts, new highs or lows, time of day etc. Whatever you are using, put that into your trading plan.

Are there any minor trading patterns that you look for? Do you look for any other minor signals that are part of your trading plan playbook?

Do you add additional positions into these trades?  Do you pyramid into trades, or just single positions?

Are there other types of trades “instinct trades?” Other trades that you may occasionally take that are not crystal clear setups, but offer you an opportunity for an asymmetrical risk reward opportunity?                                  trading plan overview

Trade Entry

Will you be using limit orders or market orders? Market orders will get you filled at the best possible price right now.

Limit orders allow you to set a maximum purchase price for your buy order, or a minimum sale price for your sell orders.

If the market doesn’t reach your limit price, your order will not be executed.

Risk Management

Where will you place your initial stop? Do you have a way to identify where you will place your stop to determine the maximum amount of risk on that particular trade. Using a pre-defined stop loss will help you determine your position sizing so you can manage your risk on that trade.

Exit or Profit Target

Where or when are you going to exit your trade? How will you determine profit targets? Will you exit a trade if a certain amount of time elapses? However you will exit the market you need to define this in your trading plan.

The Bottom Line About A Trading Plan

There is no way to guarantee that a trade will make money. Traders who win consistently treat trading as a business. Having a trading plan is crucial if you want to improve your odds of becoming consistent and survive in the trading game.

I hope you enjoyed this post! Did This Help You? If so, I would greatly appreciate it if you commented below and shared on Facebook

Here’s to YOU and I becoming BETTER traders!

Stacey Burke’s Trading Blog


PS: If you’re struggling with being consistent in your trading and you don’t have a step-by-step BLUEPRINT for your trading success… Check out my 7 Step Daily Routine For High Performance Traders CLICK HERE FOR INSTANT ACCESS

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